SEBI finds front-running scheme involving portfolio management service provider

This is a Final Order by SEBI regarding allegations of front-running, where a dealer at a stockbroker allegedly shared non-public information about a large client's upcoming trades with others to make unlawful profits. SEBI examined whether these individuals and entities violated regulations against fraudulent and unfair trade practices.

Ashok Maheshwari, Darshan Bakul Shah, Khusboo Darshan Shah, Darshan Bakul Shah (HUF), Benzer Department Stores Pvt. Ltd., Mihir Dhirajalal Savla, CHL Stock Concepts Pvt. Ltd., and Chirag Mahendra Shah.

• SEBI found that the noticees carried out a scheme of front-running trades of a Portfolio Management Service provider (Unifi Capital Pvt. Ltd.) between April 1, 2021, and May 31, 2022.
• SEBI determined that unlawful gains of approximately ₹1.30 Crore (specifically ₹1,30,15,856.95) were accrued through these trades.
• SEBI found that Noticees 6 and 8 made false statements on oath regarding how orders were placed, violating Section 11C(3) of the SEBI Act.
• The Interim Order directed the impounding of the total unlawful gain amount, which has been deposited by the noticees.
• The Interim Order restrained the noticees from buying, selling, or dealing in securities and restrained Ashok Maheshwari from associating with SEBI-registered intermediaries.

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