SEBI Bars Ketan Parekh, Seizes ₹65.77 Crore in Scam Case
The Securities and Exchange Board of India (SEBI) recently took action against Ketan Parekh, a well-known stock market operator, and two others for their involvement in a front-running scam. As a result, SEBI has barred them from participating in the stock market and seized Rs 65.77 crore in illegal profits.
Ketan Parekh has a history of market manipulation and was previously banned for 14 years after the 2000 stock market scam. This time, Parekh and Rohit Salgaocar were found guilty of orchestrating a front-running scheme targeting a major US-based fund managing $2.5 trillion globally.
Salgaocar, in consultation with the fund’s traders, shared confidential trade information with Parekh, who then executed trades to make unlawful profits. SEBI’s interim order identified 22 entities involved in the scam, with Parekh and Salgaocar at the core.
Salgaocar had a referral agreement with Motilal Oswal Financial Services and Nuvama Wealth Management, allowing him to funnel trades from the US fund to them. By consulting with the fund’s traders before placing orders in the Indian market, Salgaocar gained access to sensitive, non-public information. This enabled Parekh and Salgaocar to manipulate stock prices and carry out their illegal activities.
SEBI conducted an investigation that included search and seizure operations in Kolkata and Mumbai, revealing a pattern of matching trades between the Big Client and the front-runners. This indicated that these traders had access to confidential trade instructions. The scam exploited insider information and was orchestrated outside the regulatory framework, with Parekh and Salgaocar operating through a network of associates.
SEBI’s strict actions underscore its commitment to combating market manipulation and safeguarding the integrity of Indian financial markets.
