Stocks

SEBI bans 19 entities in front-running case related to Reliance Securities

PTI New Delhi | Updated on July 01, 2021

Around 99 per cent trades of Tata Absolute Return Fund were executed through their broker Reliance Securities

Regulator SEBI has passed a confirmatory order barring 19 entities, including individuals, from the securities market till further orders in a case of front-running activities related to Reliance Securities.

In August 20, the watchdog had passed an interim order barring a number of individuals and entities from the capital market after it unearthed a major case of front running by some dealers of Reliance Securities Ltd and their connected entities by using their prior access to sell and buy orders by Tata Absolute Return Fund.

The latest order, dated June 30, has been issued after assessing whether its directions passed against a number of entities in August 2020 need to be confirmed, revoked or modified during the pendency of investigation in the matter.

In the latest order running into 75 pages, SEBI said the findings are "prima facie" and that a detailed investigation in the matter is in progress which may bring out additional roles of omission or commission of the entities, if any.

Trades of Tata Absolute Return Fund

The regulator's internal surveillance system had generated front running alerts against one particular individual, Meena Ramnilal Vira, in December 2019 and January 2020 who was suspected to be front running the trades of Tata Absolute Return Fund, a scheme of Tata AIF (Big client). Tata AIF is a SEBI-registered alternative investment fund.

SEBI conducted a preliminary examination between December 2019 and April 2020, based on the alert. It was found that around 99 per cent trades of the big client, in value terms were executed through their broker, Reliance Securities Ltd.

The big client was placing orders through three dealers -- Harshal Ramnik Vira, Bhavesh Gandhi and Abhijeet Nandkumar Jain. They were privy to the non-public information to impending orders of the big client.

Certain entities connected to the dealers were prima facie observed to have traded depending on the impending orders of the big client on numerous occasions during different time periods during the examination period.

In the latest order, SEBI barred 19 entities 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".

Further, they have been directed to cease and desist from undertaking any activity in the securities market, directly or indirectly, in any manner whatsoever till further directions.

A few other directions pertaining to some of the individuals have also passed by Sebi. PTI

Published on July 01, 2021

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