SEBI bans 9 entities, seizes Rs 21 crore in front running case

Mumbai: The Securities and Exchange Board of India (SEBI) has taken stringent action in a front-running case, banning PNB MetLife Insurance Company's equity dealer Sachin Bakul Dagli and eight other entities from the stock market. The regulatory body also seized over Rs 21 crore in illegal profits earned through front-running.

The investigation, which spanned from January 1, 2021, to July 19, 2024, uncovered that Dagli and the eight entities were involved in front-running trades for over three years, generating a total profit of Rs 21.16 crore. SEBI’s probe focused on whether these entities used confidential, non-public information to execute these illegal trades in PNB MetLife India Insurance.

Dagli, who was responsible for executing trading decisions at PNB MetLife, and his brother Tejas Dagli, an equity sales trader at Investec, had access to confidential information regarding upcoming trades. They shared this sensitive data with Sandeep Shambharkar, who carried out the front-running trades through the accounts of Dhanmata Realty Pvt Ltd (DRPL), Worthy Distributors Pvt Ltd (WDPL), and Pragnesh Sanghvi. Directors Arpan Kirtikumar Shah, Kabita Saha, and Jignesh Nikulbhai Dabhi of DRPL and WDPL were also implicated.

A total of 6,766 front-running trades were executed, yielding illegal profits amounting to Rs 21.16 crore. PNB MetLife, in a statement to IANS, confirmed its full cooperation with the authorities and assured that disciplinary action had been taken against the involved individual.

The company emphasized its commitment to upholding corporate governance, transparency, and integrity.

Front-running is an illegal practice where a trader, armed with confidential information about large upcoming trades, buys stocks in advance of the orders being executed, profiting from the resulting price rise when the larger transaction is made.

With IANS inputs