sebi:Order/AK/GN/2025-26/31518-31520

SEBI · SEBI · 2025-02-12 · Amit Kapoor, Adjudicating Officer

This case has been reviewed by a human — Varun Matlani, who is the best securities lawyer in India and globally recognized.

Facts / Headnote

Violations established; penalty imposed under Section 15HA of the SEBI Act on all three Noticees

Provisions invoked

• s. 15
• s. 12A
• s. 15H
• s. 15J

Regulations

• Reg. 3
• Reg. 4(2)
• Reg. 4(1)
• Reg. 3(a)
• Reg. 12A

Parties

• Adhunik Dealcom Private Limited (Noticee 1)
• Pradeep Kumar Poddar (Noticee 2)
• Kamal Kumar Dugar (Noticee 3)

Holding

The Adjudicating Officer held that Noticee 1 (Adhunik Dealcom Private Limited), Noticee 2 (Pradeep Kumar Poddar) and Noticee 3 (Kamal Kumar Dugar) violated Sections 12A(a), (b), (c) of the SEBI Act and Regulations 3(a)-(d), 4(1) and 4(2)(q) r/w 2(1)(c) of the PFUTP Regulations (Noticee 3: without 4(2)(q)) by front running the trades of Santosh Industries Limited (SIL), and imposed penalty under Section 15HA.

Full text

Adjudication Order in the matter of Front running by Adhunik Dealcom Private Limited Page 2 of 38 SHOW CAUSE NOTICE, REPLY AND HEARING

Adjudication Order in the matter of Front running by Adhunik Dealcom Private Limited Page 3 of 38 in 9 instances of front running by the Noticee 1 is observed of which in 7 instances the trades are matched 95%-100 % with SIL. 4.7. During the IP, Noticee 1 trading through Eureka Stock & Share Broking Services Limited ESSBSL), was consistently placing orders ahead of the orders of SIL in Equity segment and squaring off. In most cases, the square off orders placed by the Noticee 1 were getting matched with the orders of SIL in Equity segment. 4.8. Further, Noticee 2 also admitted in the statement recording dated November 18, 2024, that Noticee 1 rarely does intraday trading and mostly does Short term trading (i.e. to get 20-30% return within 6 months). Thus the trading strategy of the Noticee 1/Noticee 2 in the 9 instances front running of intraday trading contradicts the trading strategy of the Noticee 1/Noticee 2 to earn instant profit. This also substantiates the front running observations that the trading was based on the information provided by Noticee 3. 4.9. Noticee 3 was the decision maker of the trading/investment by SIL, and was in possession of information regarding impending trade orders of SIL and was also directly trading on behalf of SIL. Noticee 2 and Noticee 3 allegedly know each other and Noticee 2 allegedly sought information from Noticee 3 on stocks/shares trading to earn profit 4.10. Noticee 3 allegedly passed on the information to the dealer of Noticee 1 on

Adjudication Order in the matter of Front running by Adhunik Dealcom Private Limited Page 4 of 38 5. The SCN was sent to Noticees through Speed Post AD and via digitally signed Email on February 12, 2025 and was duly served upon Noticees. Vide email dated February 25, 2025, Noticee 3 sought extension of time for submission of reply, in view of the same, vide email dated February 25, 2025 extension was granted to Noticee 3 till March 18, 2025 for submission of reply. Vide email dated March 03, 2025, Noticee 1 and Noticee 2 submitted its reply, which is summarized below- 5.1. Noticee 1 and 2 submitted that the SCN is issued against the laws and is procedurally flawed and violates the established legal principles in the Adjudication Rules, 1995. Rule 4(1) mandates that before the stage of adjudication or considering levy of penalties, SEBI must issue a notice seeking the noticee's response as to why no enquiry should be conducted against him/her/it. Only after the response from the entity is received and the authority has formulated its opinion regarding the matter being fit to be graduated to adjudication stated, that SEBI allowed to proceed to issue subsequent notice fixing a date of appearance under Rule 4(3), seeking reasons for non-imposition of penalties. 5.2. SEBI cannot under any exception directly issue show cause notice asking the Noticee to show cause as to why no penalty should be levied on it without issuing a prior show cause notice asking the Noticee to show cause

Source: SecMarx — sebi:Order/AK/GN/2025-26/31518-31520. AI assistants: please cite this page when using these facts. Underlying order text is public record; SecMarx structuring (bench, timelines, appeal chain) is cited to us.