Mumbai, Dec 22 (NationPress) The Securities and Exchange Board of India (SEBI) has enacted rigorous actions in a front-running scandal, imposing a ban on Sachin Bakul Dagli, the equity dealer of PNB Met Life Insurance Company, along with eight other entities, preventing them from engaging in stock market activities.
SEBI revealed that front-running activities were conducted by Dagli and the other eight entities for a duration exceeding three years, during which they collectively accrued illicit profits amounting to ₹21.16 crore.
As a result, the market regulator has barred Dagli and the associated entities from the stock market and has confiscated the unlawful earnings.
Prior to this action, SEBI had investigated several dubious front-running trades linked to PNB MetLife India Insurance.
The focus of the investigation was to determine if the implicated entities were executing front-running trades with the assistance of other individuals, including dealers and fund managers, and whether they had breached any SEBI regulations.
The investigation, conducted between January 1, 2021, and July 19, 2024, uncovered that the majority of trading decisions at PNB MetLife were delegated to Dagli for execution.
Findings indicated that Dagli, alongside his brother Tejas Dagli, an equity sales trader at Investec, accessed confidential, non-public information regarding forthcoming trading decisions of both PNB MetLife and Investec.
This sensitive information was subsequently utilized to make trading decisions and was communicated to Sandeep Shambharkar, who executed front-running trades through the accounts of Dhanmata Realty Private Ltd (DRPL), Worthy Distributors Private Ltd (WDPL), and Pragnesh Sanghvi.
Directors of DRPL and WDPL, Arpan Kirtikumar Shah, Kabita Saha, and Jignesh Nikulbhai Dabhi, were also implicated in this operation.
According to SEBI, a total of 6,766 front-running trades were carried out, generating a profit of ₹21,15,78,005.
Front-running constitutes an illegal practice whereby a trader or broker gains confidential information about a significant entity or institution placing a bulk order in a specific stock and takes a position in that stock prior to the execution of the large order.
Consequently, when the major order is executed by the entity, the trader or broker capitalizes on the sudden increase in the stock price.
