Fri Jan 03 19:38:31 UTC 2025: ## SEBI Busts ₹66 Crore Front-Running Scam, Debars 22 Entities
**Mumbai, January 2, 2025** – The Securities and Exchange Board of India (SEBI) has exposed a major front-running scam involving ₹66 crore in illicit gains. In an interim order, the regulator debarred 22 entities, including prominent stockbrokers Rohit Salgaocar (Singapore-based) and Ketan Parekh, for their alleged roles in the scheme.
The scam involved the illegal trading on advance knowledge of a large US-based fund’s (managing approximately $2.5 trillion globally) investment strategies. Salgaocar, who had access to the fund’s upcoming trades despite lacking any official connection, allegedly passed this non-public information (NPI) to Parekh.
Parekh, utilizing a network of Kolkata-based entities and employing techniques like frequent WhatsApp communication and the use of fake identities, executed trades mirroring the US fund’s activities, profiting from the advanced knowledge. This activity spanned approximately two and a half years.
SEBI’s investigation, triggered by a new alert model designed to detect information-based trading, involved search and seizure operations across Mumbai and Kolkata. The regulator uncovered a complex web of transactions, detailed in an 189-page order, including evidence from Bloomberg and WhatsApp chats and the use of “angadiyas” (informal money transfer systems). The implicated entities reportedly confessed to their involvement.
Salgaocar allegedly received kickbacks totaling ₹27 crore from Indian trading members as part of the scheme. Parekh, previously imprisoned and banned from stock markets for 14 years due to his involvement in the 2000 stock market scam, demonstrated a sophisticated operation designed to remain outside regulatory scrutiny.
The SEBI order impounds ₹65,77,11,547 in unlawful gains. This significant action highlights SEBI’s ongoing efforts to maintain the integrity of India’s securities market.
First Piper 