New Delhi: The Securities and Exchange Board of India, also called SEBI, has stopped 13 people and some Hindu Undivided Families from trading in the stock market for up to three years. SEBI found that these people made unfair profits by doing something called front running. Front running means buying or selling shares before a big client’s order because they already know that the large order will soon change the price. By doing this, they earned money in an unfair way. SEBI said this kind of action is wrong because it uses secret information that normal investors do not know.
The investigation showed that this happened between January 2021 and October 2022. During this time, the trades were linked to three family trusts named the Bharat Kanaiyalal Sheth Family Trust, the Ravi Kanaiyalal Sheth Family Trust, and the Arjun Discretionary Trust. Some people connected to a broker or sub-broker used different HUF accounts to make these trades and took advantage of upcoming big orders.
SEBI’s Action:
SEBI has punished these 13 people and HUFs by stopping them from trading in the securities market for one to three years. They also have to pay fines, with some amounts going up to about ₹15 lakh. SEBI said that all open market positions must be closed within three months, and the people involved cannot sell their other assets except to pay their fines.
SEBI explained that such activities hurt the honesty of the market. The stock market should be fair for everyone, and no one should use hidden information to make money. SEBI said it took this strong action to make sure that all traders follow the rules and to show that unfair trading will not be accepted.
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