Six entities, including Samir Kothari and Jitendra N Kewalramani, have settled a front-running trade case with the Securities and Exchange Board of India (SEBI) by paying Rs 3.49 crore in settlement charges. The case involved alleged front-running of trades on the National Stock Exchange (NSE) from January 2021 to October 2022.
The other parties involved in the settlement include Kuntal Goel, Jitendra N Kewalramani HUF, Dipika J Kewalramani, and Pallavi Shailesh Nayak. Along with the settlement, these entities will also voluntarily stay away from securities markets for six months.
Allegations and Investigation Findings
SEBI alleged that they had been consistently placing orders prior to large clients such as Bharat Kanaiyalal Sheth Family Trust, Ravi Kanaiyalal Sheth Family Trust, and Arjun Discretionary Trust. The accused were suspected of using non-public information about impending orders for trading and generating abnormal profits.
The investigation thus established a connectivity between Jitendra N Kewalramani and the other accused including connectivity by way of employer-employee relationship and frequent communications. The SEBI alleged violations of Prohibition of Fraudulent and Unfair Trade Practices norms during this period.
The settlement terms proposed by the accused entities, without admitting or denying the allegations, had been approved by the High Powered Advisory Committee of the Securities and Exchange Board of India. The committee has directed disgorgement of illicit gains amounting to ₹2.06 crore apart from the settlement amount of ₹3.49 crore.
Key payments included:
- Rs 64.29 lakh by Jitendra N Kewalramani.
- Rs 55.90 lakh by Kuntal Goel.
- Rs 57.20 lakh each by Samir Kothari, Jitendra N Kewalramani HUF, Dipika J Kewalramani, and Pallavi Shailesh Nayak.
The settlement brings closure to the proceedings initiated by SEBI with a show-cause notice dated January 24, 2024.
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Source: Moneycontrol
News Desk
