The SEC has been investigating the admitted financial fraud at India's Satyam for just over a year now. It was January 7, 2009 when B. Ramalinga Raju, chairman and chief executive of Satyam, suddenly resigned after confessing to falsifying the company’s financial records in a $1 billion fraud. Raju famously stated that day that the ongoing fraud had been "like riding a tiger, not knowing when to get off without being eaten.”

The SEC is investigating the Indian company because although Satyam securities are traded in India, they are also traded as ADRs in the U.S. There have been numerous reports of SEC attorneys visiting Satyam in India, but no information about the investigation has surfaced to date.

This week, however, it was reported that the SEBI, India's securities regulator, has now asked the SEC not to take any action against Satyam as it would "amount to punishing shareholders of the IT company for a second time." The Economic Times reports that Indian Corporate Affairs Minister Salman Khurshid said that "SEBI has marshalled a request (to US Securities Exchange Commission) and we are monitoring them. On the political level such signals can be sent and we have already sent them." Khurshid added that "The case has been laid out quite well. And the case being that nothing should actually punish the shareholders a second time over...because any fine imposed on the company will inevitably hurt the shareholders."

I do not believe the SEC will walk away so quickly from this, but it is worth keeping an eye on where this goes.