SEBI finds Dubai logins contradict broker's claim in Axis Fund front-running case

Who it concerns: Inventure Growth and Securities Ltd (Noticee 1) and Mr. Rushbha Vinay Nisar (Noticee 2, Authorised Person of Inventure).

What SEBI found or ordered

• SEBI investigated trading activities from April 1, 2020, to March 31, 2022, based on internal alerts for suspected front-running.
• SEBI alleged that Inventure and its AP failed to maintain documentary proof of order placement communications as required by SEBI circulars and regulations.
• SEBI found that trading terminals allocated to the AP were accessed from unregistered locations, including Dubai, UAE, by unauthorized persons, despite the assigned dealer never traveling abroad.
• SEBI observed that Inventure failed to conduct independent audits of its AP, relying instead on self-declarations by the AP and 'trust' during the pandemic period.
• The order cites violations of SEBI (Stock Brokers) Regulations, 1992, and various NSE circulars regarding terminal usage and internal audits.

Also in the document

• SEBI noted that IP geolocation data indicated terminal logins from Dubai, UAE, which contradicted the AP's claim that no dealers traveled outside India.
• SEBI highlighted that internal audit reports submitted by Inventure were undated and signed solely by the AP, indicating they were self-declarations rather than independent audits.
• The investigation period covers two years (2020-2022), coinciding with the pandemic period which the broker cited as a reason for reduced verification.