Crackdown on Front-Running: Sebi Bars Eight Entities, Secures Illicit Gains

The Securities and Exchange Board of India (Sebi) has barred eight entities from trading in securities and seized Rs 4.82 crore in illicit gains from alleged front-running activities. This illegal trading practice involved Ashish Kothari and associates using insider information to profit from preemptive trades.

The Securities and Exchange Board of India's crackdown on illegal trading practices took a decisive turn as it barred eight entities from the market on Monday. Sebi, acting on evidence gathered from a comprehensive investigation into alleged front-running activities, impounded illicit gains of Rs 4.82 crore.

Front-running, an illegal activity where traders use non-public information to execute trades ahead of significant market moves, was at the center of the Sebi probe. The investigation focused on suspicious trades linked to Gagandeep Consultancy Private Limited, a prominent client, over a period from September 2018 to September 2023.

The interim findings highlighted the involvement of Ashish Kirti Kothari and his associates, who reportedly used insider information provided by stock broker Nirav Mahendra Sapani. The illegal profits, facilitated through Krishna Tukaram Kadam's accounts, were distributed among the participants, violating multiple provisions of the Sebi Act.

(With inputs from agencies.)