Srinath Batni, an executive director who heads up the Strategic Groups unit for the Bangalore-based software and IT consultancy firm Infosys, was fined about $10,700 for failing to notify the company, in a timely manner, that he sold 10,000 company shares the week before, according to a regulatory filing. Infosys’ insider trading rules state that directors and officers may buy or sell company stock only after prior notification is given to the company. Further, notification must also be given within one working day of the stock sale.

Batni notified the company of his intent to sell shares; however, he was eight days late reporting the completed transaction to the company. Although the company said Batni’s violation was inadvertent, it was considered a technical violation in the eyes of the Infosys audit committee, which is responsible for monitoring management’s compliance with business conduct standards.
Source: 08/30/2006
A good example of the independence and strict monitoring that should be done by the audit committee. By imposing the fine the audit committee showed its intent to keep a good eye on the financial working of the company and being proactive about compliance with rules and regulations.
Even though the fine amount looks like a meager $10.7K, the severity of it can be seen by the fact that it is actually is a quarter of Batni’s salary for the year. There are rules and one needs to adhere to them or face the stiff consequences.