SEBI Restrains 2 Individuals For 6 Months, Orders ₹34.26 Lakh Disgorgement For Front-Running Activities

The market regulator SEBI on Tuesday restrained two persons from the securities market for six months and directed them to disgorge Rs 34.26 lakh “wrongful gains" made through their involvement in front-running activities.

The regulator also imposed a penalty of Ra 5 lakh each on trading accountant Mandar Ulhas Bhatkar and dealer Vikrant Bhimrao Kadam for front running of trades of SVI Consolidated Pvt. Ltd. in the cash market and equity derivatives segments of NSE.

The market watchdog ordered both from "accessing the securities market and further prohibited from buying, selling or otherwise dealing in securities, directly or indirectly, or being associated with the securities market in any manner, whatsoever, for a period of six months" and "directed to disgorge, jointly and severally, a sum of ₹34.26 lakh within 45 days and the same shall be credited into the Investor Protection and Education Fund.”

The SEBI regulations prohibits front-running referring to an illegal practice in the stock market where an entity trades based on advanced information from a broker or analyst before the information has been made available to its clients.