SEBI
Capital markets regulator SEBI has busted a ‘front-running’ scheme involving PNB MetLife India Insurance Company’s equity dealer Sachin Bakul Dagli and eight other entities. These people had earned illegal profit of Rs 21.16 crore through this scheme. Let us tell you that ‘front running’ means making transactions in the stock market on the basis of advance information and earning profit. Till that time this information is not available to the customers. Front-running by these units continued for more than three years. SEBI, through an interim order on Friday, banned Sachin Bakul Dagli and eight other entities from the securities market and confiscated the illegal profits earned by them.
Found guilty in SEBI investigation
SEBI had investigated suspected ‘front running’ by some entities in the transactions of large customers of PNB MetLife India Insurance Company Limited. The objective of the investigation was to determine whether the suspected entities colluded with others, including dealers and/or fund managers, to front run transactions of large clients. Thus, these people had violated SEBI’s PFUTP (Prohibition of Fraudulent and Unfair Trade Practices) rules and provisions of the SEBI Act. The period of investigation was from January 1, 2021 to July 19, 2024. In its investigation, SEBI found that decisions related to most of the transactions in PNB MetLife were handed over to Sachin Dagli for execution. The regulator found that Sachin Bakul Dagli (Equity Dealer, PNB MetLife) and his brother Tejas Dagli (Equity Sales Trader, Investec) received confidential, non-public information about upcoming orders from institutional clients of PNB MetLife and Investec. He used this information for transactions and shared it with Sandeep Shambharkar, who front running transactions through the accounts of Dhanmata Realty Pvt Ltd (DRPL), Worthy Distributors Pvt Ltd (WDPL) and Pragnesh Sanghvi. Implemented.
6,766 cases of front running were reported
Directors of DRPL and WDPL, including Arpan Kirtikumar Shah, Kavita Saha and Jignesh Nikulbhai Dabhi, also took advantage of the scheme. These persons colluded to create and execute a fraudulent front-running scheme in violation of the SEBI Act and Fraudulent and Fair Trade Practices (PFUTP) Regulations and thereby made illegal profits. SEBI said that 6,766 such cases of front running were revealed through the accounts of DRPL, WDPL and Pragnesh Sanghvi. These units earned illegal profit of Rs 21,15,78,005 through this. SEBI said that the process of front running activities in the accounts of these units continued for a long time i.e. more than three years. SEBI has banned these units from buying and selling shares directly or indirectly till further orders.
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