SEBI Bars 9 Entities in Front Running Case, Seizes Rs 21 Crore
In a recent turn of events, the Securities and Exchange Board of India (SEBI) has taken firm action in response to a front-running case, resulting in the banning of PNB Met Life Insurance Company’s equity dealer, Sachin Bakul Dagli, and eight other entities from the stock market. Together, they accumulated illegal profits totaling Rs 21.16 crore over a period of more than three years.
Following a thorough investigation, SEBI has decided to bar Dagli and the eight entities from further involvement in the stock market, along with seizing their unlawful gains. The focus of the inquiry was on detecting any front running in the trade of PNB MetLife India Insurance, particularly through the assistance of additional individuals such as dealers and fund managers, and making sure all SEBI regulations were adhered to.
The investigation, spanning from January 1, 2021, to July 19, 2024, revealed that Dagli, PNB MetLife’s equity dealer, along with his brother Tejas Dagli, an equity sales trader at Investec, accessed confidential, non-public information about the forthcoming trading decisions of PNB MetLife and Investec. This information was then utilized to dictate trading actions and relayed to Sandeep Shambharkar, who executed front-running trades using the accounts of Dhanmata Realty Private Ltd (DRPL), Worthy Distributors Private Ltd (WDPL), and Pragnesh Sanghvi. The Directors of DRPL and WDPL, Arpan Kirtikumar Shah, Kabita Saha, and Jignesh Nikulbhai Dabhi, were also implicated in these activities.
A total of 6,766 front-running trades were completed, generating a profit of Rs 21,15,78,005. Front-running is an illicit maneuver where a trader or broker gains confidential information about a large institution making significant stock orders and uses this knowledge to profit from the ensuing stock price rise upon the execution of the large order.
SEBI’s proactive stance in penalizing these entities for this unethical behavior is a crucial step in safeguarding the integrity of the stock market and ensuring fair practices for all investors and stakeholders involved.
