Fri Jan 03 12:10:40 UTC 2025: ## SEBI Busts Sophisticated Front-Running Scheme Involving Notorious Stock Manipulator

**Mumbai, India** – The Securities and Exchange Board of India (SEBI) has uncovered a complex front-running scheme involving convicted stock manipulator Ketan Parekh, a Singapore-based trader Rohit Salgaocar, and a US-based fund. The regulator alleges the group illicitly profited from confidential information about the fund’s large trades, generating approximately ₹65.77 crore (approximately $8 million USD) in unlawful gains.

The scheme involved Salgaocar allegedly passing non-public information (NPI) about the US fund’s (referred to as the “Big Client”) impending trades to Parekh. Parekh then directed six entities, including brokerages GRD Securities Ltd and Salasar Stock Broking Ltd, and individuals like Anirudh Damani and his uncle Ashok Damani, to execute trades ahead of the fund, capitalizing on the price movements.

SEBI’s 30-month investigation, which included a three-day search and seizure operation, revealed a coordinated effort using coded communication (WhatsApp chats and calls using aliases like “Jack” and “Boss”) and strategic trading. The investigation also unearthed a referral agreement between Salgaocar’s company and brokerage firms Motilal Oswal Financial Services Ltd and Nuvama Wealth Management Ltd, which facilitated the routing of the Big Client’s trades.

The regulator has issued show-cause notices to 22 individuals and entities, including Parekh, Salgaocar, and the six “frontrunners.” As an interim measure, SEBI has impounded ₹65.77 crore in alleged unlawful profits and temporarily barred Parekh and Salgaocar from trading. The noticees have 21 days to respond to the allegations. The case highlights SEBI’s ongoing efforts to combat sophisticated financial malpractice in India’s capital markets. Motilal Oswal declined to comment on the matter; Nuvama has yet to respond to SEBI’s requests.

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