US SEC lawsuit against Adani alleging fraud paused amid govt shutdown

A lawsuit by the US Securities and Exchange Commission (SEC) accusing Adani Group Chairman Gautam Adani of violating securities laws has been temporarily paused due to the US federal government shutdown, Bloomberg reported.

Adani was indicted in November by Brooklyn prosecutors, who accused him of fraud and orchestrating a $250 million bribery scheme. The five-count criminal indictment also names his nephew, Sagar R Adani, and Vneet S Jaain, executives at Adani Green Energy Ltd., for allegedly violating federal laws.

In parallel, a civil suit filed by the SEC alleges that Gautam and Sagar Adani made false and misleading statements about Adani Green Energy under US securities laws. In a filing dated October 10, regulators said the SEC attorney handling the case was “unavailable to work on this matter” while on furlough during the government shutdown.

On Wednesday (local time), US Magistrate Judge James Cho granted the SEC’s request and directed the government to file a status report within 30 days after the shutdown ends.

The criminal proceedings have not been affected by the shutdown. Moreover, none of the defendants or their lawyers have yet made appearances in court. In addition to Gautam, Sagar, and Jaain, prosecutors have charged five others with conspiring to violate the US Foreign Corrupt Practices Act (FCPA) in connection with the alleged bribery scheme.

The Adani Group has dismissed the US allegations as “baseless.” In June, Gautam Adani stated, “Despite all the noise, the facts are that no one from the Adani Group has been charged with violating the FCPA or conspiring to obstruct justice.”

Background: SEC claims and procedural delays

The SEC and US prosecutors allege that in 2021, Adani and associates promised more than $250 million in bribes to Indian officials to secure solar energy contracts, and then raised investor funds in the US while concealing the misconduct. The SEC’s complaint claims that Adani’s group raised about $175 million from US investors during the scheme.

However, for Indian-based defendants, the SEC’s ability to serve legal summons relies on cooperation with India’s Ministry of Law and Justice under the Hague Service Convention. As of recent filings, the SEC says the summons have not yet been formally effected.

Implications and status going forward

With enforcement actions in the civil suit paused, momentum could shift toward procedural and diplomatic maneuvers. The shutdown underscores how external events, such as federal funding lapses, can interrupt high-stakes cross-border litigation.

Still, the criminal case remains active. The parallel nature of criminal and civil proceedings means this case will likely continue to cast a long shadow over Adani’s global fundraising and corporate governance reputation.