Fri Jan 03 19:38:32 UTC 2025: ## SEBI Busts Ketan Parekh’s ₹65 Crore Front-Running Scam

**Mumbai, India** – The Securities and Exchange Board of India (SEBI) has exposed a massive front-running scam involving ₹65.77 crore, implicating notorious stockbroker Ketan Parekh and Singapore-based trader Rohit Salgaonkar. Both have been banned from the market, along with two other unnamed individuals.

Parekh, once a prominent figure in the Indian stock market, was previously jailed in 2000 for a similar scam and banned for 14 years. This latest action reveals his continued involvement in illegal market activities.

The scam involved exploiting non-public information (NPI) related to a large American fund house, referred to as the “Big Client,” registered as a Foreign Portfolio Investor (FPI) in India. SEBI hasn’t disclosed the Big Client’s identity.

Salgaonkar allegedly obtained trading information from the Big Client’s dealers and relayed it to Parekh, who then executed trades through associates in Kolkata, profiting from the NPI. This operation, spanning almost two and a half years, involved Parekh using various aliases (Jack, Jack New, Boss) and frequently changing SIM cards while using consistent handsets to avoid detection. SEBI tracked his activities through mobile number analysis and IMEI numbers.

The investigation revealed Parekh’s sophisticated methods, mirroring the techniques of the infamous Harshad Mehta. He employed a “pump and dump” strategy, allegedly manipulating the prices of stocks and profiting from insider information. One example cited is his involvement with Pentafour Software, a Chennai-based company where he manipulated stock prices through collusion with promoters. The company’s share price skyrocketed from ₹175 to over ₹2000 before the scam was exposed.

SEBI’s thorough investigation, using mobile phone data and tracking Parekh’s methods, ultimately led to the uncovering of this extensive fraud. The regulator’s decisive action underscores its commitment to combating market manipulation and protecting investors. The ban on Parekh and Salgaonkar sends a strong message against such illegal activities.

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