Mumbai: India's financial watchdog, the Securities and Exchange Board of India (SEBI), has barred 13 individuals from participating in the securities market after determining their involvement in front-running trades by three trusts. The trusts implicated in the investigation include the Bharat Kanaiyalal Sheth Family, Ravi Kanaiyalal Sheth Family, and the Arjun Discretionary Trust.
The probe, covering transactions from January 1, 2021, to October 31, 2022, found that these individuals executed trades ahead of the trusts' large stock orders. By leveraging insider knowledge of pending transactions, they gained an unfair advantage, undermining market integrity. Front-running, considered a serious violation in financial markets worldwide, involves using non-public information to profit before official trades are executed.
In addition to banning these individuals from the securities market, SEBI has levied financial penalties ranging from â‚ą500,000 to â‚ą1.5 million (approximately $5,689 to $17,066). The regulator emphasized that such enforcement measures are crucial to deter malpractice and maintain a level playing field for all market participants.
SEBI's decisive action highlights its ongoing commitment to transparency and ethical conduct in India’s rapidly growing financial markets, sending a clear message that insider trading and manipulative practices will face stringent consequences.