Sebi Bans Ketan Parekh and Others from Securities Markets
The Securities and Exchange Board of India (Sebi) has taken action against three individuals, including Ketan Parekh, for their alleged involvement in a front-running scheme that reportedly generated illegal profits amounting to Rs 65.77 crore. Sebi has barred these individuals from participating in the securities markets immediately and directed them to impound the unlawful gains.
Front-running is an illegal stock market practice where trades are made based on advance information from brokers or analysts before it is shared with clients. Sebi has issued show cause notices to 22 entities, including Parekh, Rohit Salgaocar, and Ashok Kumar Poddar, asking why penalties should not be imposed within 21 days of receiving the order.
Sebi’s interim order, spanning 188 pages, revealed that Rohit Salgaocar and Ketan Parekh orchestrated the scheme to profit from non-public information related to a major client, with Ashok Kumar Poddar admitting to facilitating these activities. The regulator noted that trades were communicated via WhatsApp or calls from contacts saved as Jack/Jack New/Jack Latest New/Boss before being executed.
Ketan Parekh, known for market manipulation in the past, has a history of involvement in manipulative trades through his broking firms and investment companies, leading to the 2001 stock market crash and a subsequent 14-year ban from securities markets. The current proceedings focus on investigating activities from January 1, 2021, to June 20, 2023.
Sebi’s actions are aimed at maintaining market integrity by addressing fraudulent practices and deterring future violations. By barring individuals involved in front-running schemes and impounding illegal gains, Sebi emphasizes its commitment to upholding fair trading practices in the securities market and ensuring that such activities do not go unchecked.
