SEBI Bans 9 Entities, Seizes Rs 21 Crore in Front Running Case in Gujarat
Market regulator SEBI has taken action against PNB Met Life Insurance Company’s equity dealer Sachin Bakul Dagli and eight other entities for engaging in front running activities. Over a period of more than three years, Dagli and the eight entities collectively earned illegal profits totaling Rs 21.16 crore. As a result, SEBI has banned them from the stock market and seized the unlawfully gained funds.
The investigation conducted by SEBI focused on suspicious front-running trades related to PNB MetLife India Insurance. It aimed to determine if these entities were involved in front running with the assistance of dealers and fund managers, and if SEBI regulations were violated. The investigation found that Dagli, as the equity dealer of PNB MetLife, and his brother Tejas Dagli, an equity sales trader at Investec, obtained confidential information about trading decisions. This information was used to make trading decisions and shared with Sandeep Shambharkar, who executed front-running trades through several accounts.
In total, 6,766 front-running trades were carried out, resulting in profits of Rs 21,15,78,005. PNB MetLife expressed its cooperation with authorities and took disciplinary action against the individuals involved. The company emphasized its commitment to corporate governance, transparency, and integrity.
Front running is an illegal practice where a trader or broker gains confidential information about a large company or institution’s bulk order in a specific stock and takes positions before the order is executed. This unethical behavior allows the trader to benefit from the sudden rise in the stock price when the large order is placed.
