SEBI cracks down on front-running trades, bars 13 entities from markets
New Delhi, Oct 24, 2025
SEBI has barred 13 individuals and entities from the securities market for 1-3 years for front-running trades using non-public information, generating unlawful gains of over ₹2 crore
Securities and Exchange Board of India (SEBI) on Friday barred 13 individuals and entities from accessing the securities market for one to three years for carrying out front-running trades on the basis of non-public information.
The action follows an investigation into trades executed between January 2021 and October 2022 involving the orders of three family trusts—Bharat Kanaiyalal Sheth Family Trust, Ravi Kanaiyalal Sheth Family Trust and Arjun Discretionary Trust—collectively referred to as the “Big Client". SEBI found that certain entities had “traded ahead of the impending orders of the Big Client after having access to non-public information".
According to the order, the regulator observed that “the whole episode shows unwarranted interference in the operation of ordinary market forces and undermines the integrity and efficiency of the market.” It added that the conduct of the noticees “disturbed the basic tenets of fairness in the securities market, i.e. of having a level playing field.”
The barred individuals include Shankar Tukaram Vadatkar, Sakshi Shankar Vadatkar, Dipesh Mehta, Piyush Mehta, and others who traded either in their own names or through accounts of Hindu Undivided Families (HUFs) and spouses. SEBI held them guilty of violating Sections 12A(a), (b), (c), and (e) of the SEBI Act and Regulations 3 and 4 of the Prohibition of Fraudulent and Unfair Trade Practices (PFUTP) Regulations, 2003.
The order stated that the main frontrunner had obtained non-public information through an intermediary employee and shared it with connected entities, who then executed trades in advance of the Big Client’s orders. SEBI found 424 instances of such trades that generated unlawful gains of over ₹2 crore.
"The whole picture on the canvas suggests tell-tale strands of how each one of the connected entities at various sequences in the chain has catalysed the misuse of non-public information for their own benefit in a web of make-believe trickery to mislead and obfuscate, to the final confluence of making wrongful gains from fraudulent trading," the order noted.
Earlier, six accused, including the main front-runner, had settled the case in December 2024 by paying settlement amounts and accepting a six-month market ban, it added. Stockbroker Angel One Limited, through which most of the trades were executed, also settled separate proceedings in September 2024 by paying ₹21,64,500 and agreeing to take “corrective measures” for lapses in maintaining client order records and voice logs.
SEBI further restrained 13 other accused from “buying, selling or otherwise dealing in securities, directly or indirectly” for periods ranging from one to three years and directed them to disgorge their unlawful gains.
[The Business Standard]
