Sebi Cracks Down: Khaitan Family Barred for Front-Running

Sebi has banned five individuals, including members of the Khaitan family, from the securities markets for one year due to their involvement in illegal front-running activities. They are required to return nearly Rs 1.53 crore of illicit gains and face monetary penalties for breaching PFUTP norms.

In a stern measure to combat fraudulent practices, India's capital markets regulator, the Securities and Exchange Board of India (Sebi), has barred five individuals from trading in securities markets for a year, citing their engagement in illicit front-running activities. The offenders, including key members of the Khaitan family, are alleged to have amassed nearly Rs 1.53 crore through manipulative tactics.

The Sebi crackdown includes penalties amounting to Rs 10 lakh for Nikhil Khaitan, with additional fines of Rs 5 lakh each for Om Prakash Khaitan, Manju Khaitan, Neha Khaitan, and Nidhi Tibrewal. The legal action follows the discovery that these individuals leveraged confidential market information to gain undue advantage over other investors.

The investigation, conducted over a six-year period from 2016 to 2022, unveiled patterns of front-running, a practice where trades are executed based on pre-released information, distorting market supply and demand dynamics. Sebi has ordered the implicated parties to return their illegal gains jointly and severally, underscoring its resolve to uphold market integrity.

(With inputs from agencies.)