US DoJ Calls Adani Securities Fraud Case Legally Flawed; Seeks Dismissal

The US Department of Justice (DoJ) has told a federal court that criminal securities charges against Adani Group Chairman Gautam Adani should never have been pursued, arguing they were essentially unsuccessful Foreign Corrupt Practices Act (FCPA) allegations repackaged as securities fraud.

In a July 4 filing seeking dismissal of all charges, Principal Associate Deputy Attorney General R Trent McCotter said the case rested on conduct that occurred almost entirely in India, involving Indian nationals, an Indian company, Indian government officials and Indian contracts, with only limited links to the United States.

The DoJ said the prosecution faced significant legal risks because the securities initially sold outside the US and the alleged misstatements also occurred abroad. It further argued that prosecutors had tried to turn allegations of undisclosed misconduct into criminal securities fraud, despite appellate rulings that companies generally have no obligation to disclose uncharged wrongdoing and that courts often consider broad statements on ethics and compliance to be non-actionable corporate puffery.

The department also noted that the investors remained sophisticated institutions, making it difficult to establish reliance on the alleged misstatements.

McCotter said the decision to dismiss the charges followed an independent legal review of submissions from both prosecutors and defence lawyers and that, at most, the allegations were suitable for civil resolution.

The DoJ also rejected media reports linking the dismissal to potential Adani-related investments in the United States, calling such claims false and criticising anonymous leaks from current and former department officials. It maintained that the legal record, not anonymous reporting, exposed fundamental flaws in the prosecution, including jurisdictional challenges, the absence of investor losses, evidentiary hurdles and parallel reviews in India. It argued that prosecutors should have dropped the charges much earlier or never filed them.

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