Regulator SEBI on Monday barred Vaibhav Dhadda, an employee of Fidelity International, his mother Alka and sister Arushi from the capital markets for indulging in ‘front running’ activities.

SEBI said that detailed investigation in the matter is in progress which may bring out additional roles of the entities, if any.

In a confirmatory order, the regulator has restrained Vaibhav Dhadda (or Avi Dhadda), Alka Dhadda and Arushi Dhadda “from buying, selling or dealing in the securities market or associating themselves with securities market, either directly or indirectly, in any manner whatsoever till further directions.”

SEBI, through an interim order passed in December 2019, had restrained these persons from the capital markets.

It further said that they have not been able to make out a prima facie case for revocation of the interim order.

The regulator’s surveillance system had generated alerts for possible instances of front running by certain entities during May-August 2019.

Following this, the regulator conducted a preliminary probe to look into possible violation of various norms, including PFTUP (Prohibition of Fraudulent and Unfair Trade Practices).

The SEBI probe found that Vaibhav, being the trader on behalf of Fidelity Group, was in possession of non-public information of the impending trades of Fidelity Group entities.

He had directed his mother and sister to open bank accounts and trading accounts immediately before executing the prima facie front running trades. He had transferred funds to his mother. His mother who has no source of income, had transferred funds to Arushi, who is a student with no source of income.

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