In a recent settlement with the Securities and Exchange Board of India (SEBI), six entities, including Samir Kothari and Jitendra N Kewalramani, have agreed to pay Rs.3.49 crore in connection with suspected front-running trades. This settlement follows an investigation into potential violations of SEBI’s Prohibition of Fraudulent and Unfair Trade Practices (PFUTP) rules during the period from January 2021 to October 2022.
The other entities involved in the settlement include Kuntal Goel, Jitendra N Kewalramani HUF, Dipika J Kewalramani, and Pallavi Shailesh Nayak. As part of the settlement, these entities have voluntarily agreed to suspend their participation in securities markets for six months.
Additionally, SEBI’s committee imposed further conditions, including the disgorgement of unlawful gains totalling Rs.2.06 crore, along with 12% annual interest from the date of the impugned transactions to the date of filing the settlement application. Samir Kothari, Kuntal Goel, and Jitendra N Kewalramani will pay this amount.
The SEBI investigation revealed that the applicants and others consistently placed orders ahead of major clients such as Bharat Kanaiyalal Sheth Family Trust and Arjun Discretionary Trust, among others.
SEBI alleged that Jitendra, an authorized person of Angel One, accessed non-public information about the impending trades and executed front-running trades through his own and his associates’ accounts.
SEBI also noted that Jitendra directly connected to Kothari through an employer-employee relationship, while Goel and the others accessed the details of these trades through their association with Jitendra.
This resulted in abnormal profits from the trades, violating PFUTP norms.
Following the investigation, the six entities filed revised settlement terms, which were approved by SEBI’s High Powered Advisory Committee. In addition to the settlement, the individual payments made were as follows: ₹64.29 lakh by Jitendra N Kewalramani, Rs.55.90 lakh by Kuntal Goel, and ₹57.20 lakh each by Kothari, Jitendra N Kewalramani HUF, Dipika J Kewalramani, and Pallavi Shailesh Nayak.
This settlement closes the investigation, with the case now officially disposed of.
, six entities, including Samir Kothari and Jitendra N Kewalramani, have agreed to pay Rs.3.49 crore in connection with suspected front-running trades. This settlement follows an investigation into potential violations of SEBI’s Prohibition of Fraudulent and Unfair Trade Practices (PFUTP) rules during the period from January 2021 to October 2022.){kind=link}