Six firms to settle front-running trade case with SEBI for Rs. 3.49 crore pays

Six entities, including Sameer Kothari and Jitendra N Kevalramani, on Thursday settled with SEBI for settlement charges of Rs. 3.49 crore settled a case related to suspected front-running of the business. Kuntal Goyal, Jitendra N Kevalramani HUF, Deepika J Kevalramani and Pallavi Shailesh Nayak are among the other entities that settled the matter with the Securities and Exchange Board of India (SEBI).

Apart from the settlement amount, SEBI’s committee had set other conditions for settling the case. In which Sameer Kothari, Kuntal Goyal and Jitendra N Kevalramani to pay a total of Rs. 2.06 crore involving misappropriation of illegal benefits.

Also, six institutions will voluntarily remove themselves from the securities market for six months.

The order came after SEBI received four separate settlement applications from petitioners proposing to settle the instant proceedings through a settlement order “without admitting or denying the allegations”.

SEBI Chief General Manager Santosh Shukla said in the settlement order, “It is hereby ordered that the proceedings initiated against the petitioners vide show cause notice dated 24th January, 2024 be disposed of.”

SEBI conducted an inquiry to find out whether there was any violation of PFUTP (Prohibition of Fraudulent and Unfair Trade Practices) rules during the period January 2021 to October 2022.

Pursuant to the enquiry, a show cause notice dated January 24, 2024 was issued to certain entities including the petitioners.

The SCN alleged that the petitioners and other notices in the Equity (Cash) segment of the NSE were and were consistently placing orders ahead of Bharat Kanaiyalal Seth Family Trust, Ravi Kanaiyalal Seth Family Trust and Arjun Discretionary Trust (collectively known as large clients). Squaring off the same.

Further, Jitendra, who was an authorized person of Angel One, was in possession of the details of the orders to be placed by the big clients, directly or indirectly.

Accordingly, during the investigation period front running trades were allegedly executed by him in his own trading account and in the trading accounts of certain entities including the petitioners (other than Kuntal Goyal and Sameer Kothari) who were/are associated with him during the investigation. duration

Sebi also alleged that Jitendra was connected to Kothari through an employer-employee relationship, while Kuntal, who had information about impending deals of large clients, connected with Sameer Kothari through frequent calls, which required Jitendra to reach out to non-companies. . Public information of impending orders from large customers.

The rest of the notices/applicants were directly or indirectly, in the possession of Jitendra, the details of pending orders placed on behalf of large customers, who then placed the orders in the accounts of the customers to earn exorbitant profits.

Therefore, the regulator alleged that the notices violated the PFUTP norms.

Thereafter, the petitioners filed revised settlement terms which were approved by SEBI’s High Powered Advisory Committee (HPAC).

Apart from remitting the disgorgement amount, personally, Jitendra N Kevalramani paid Rs. 64.29 lakh was paid, while Kuntal paid Rs. 55.90 lakh, and 57.20 lakh paid by Kothari, Jitendra N Kevalramani HUF, Deepika J Kevalramani and Pallavi Sailesh Nayak.