SEBI Imposes Penalty of Rs 1.5 Crore on Eight Entities for Front-Running Trades
The Securities and Exchange Board of India (SEBI) has fined eight entities a total of Rs 1.5 crore for front-running trades using secret information from a portfolio management client.
Penalties range from Rs 15 lakh to Rs 25 lakh per entity, with extra fines for two individuals who lied during the investigation.
SEBI also asked these entities to return illegal gains of Rs 1.29 crore with 12% annual interest to the Investor Protection and Education Fund (IPEF).
The regulator said Ashok Maheshwari, who had access to confidential information about a “Big Client”, shared this data with Darshan Bakul Shah. Shah traded in his own account, his wife’s account, a HUF account, and other companies to make profits before the client’s orders were executed.
SEBI noted that the trades followed a clear pattern of timing and prices, showing an intentional plan to use secret information for illegal profit.
Two other individuals, Mihir Dhirajalal Savla and Chirag Mahendra Shah, were found guilty of making false statements to hide the misuse of client accounts.
The persons and parties concerned include Ashok Maheshwari, Darshan Bakul Shah, Khusboo Darshan Shah, the Hindu Undivided Family (HUF) of Ashok Maheshwari, Benzer Department Stores Pvt Ltd, CHL Stock Concepts Pvt Ltd, Mihir Savla, and Chirag Shah.
SEBI also banned them from the securities market for different periods and restrained Ashok, Darshan, and Chirag from holding key positions in listed companies or SEBI-registered intermediaries for two years.
