sebi:QJA/SS/IVD-2/ID19/32297/2025-26
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Provisions invoked
- s. 11B
- s. 11
- s. 11(4)
- s. 19
- s. 12A
- s. 12
- s. 11(2)
- s. 15H
- s. 11A
- s. 15I
- s. 15J
- s. 15
- s. 15F
- s. 28A
- s. 28
- s. 11B(1)
- s. 26A
Regulations
- Reg. 3
- Reg. 2(1)(c)
- Reg. 4(1)
- Reg. 9
- Reg. 10
- Reg. 8
- Reg. 4(2)
- Reg. 27
- Reg. 2
- Reg. 8(2)
- Reg. 3(a)
- Reg. 27(2)
- Reg. 4(2)(q)
Parties
- Umang Chaturvedi
- Vishvanath Goswami
- Shyam Chaturvedi
- Vinod Kumar Chaturvedi
- Preeti Goswami (deceased, represented by Legal Representative)
Holding
The order finds the Noticees (Chaturvedi Group entities) liable for front running the trades of a Big Client, in contravention of Section 12A of the SEBI Act and Regulations 3 and 4 of the PFUTP Regulations. The order rejects various procedural and merits-based contentions raised by the Noticees.
Full text
Order in respect of Front Running of Trades of Big Client by certain entities of Chaturvedi Group Page 2 of 77 (i) Alleged Contraventions 8-17
Order in respect of Front Running of Trades of Big Client by certain entities of Chaturvedi Group Page 3 of 77 SEBI Act provides for anti-fraud prohibitions in wide terms so as to include any device, scheme or artifice to defraud in connection with issue or dealing in securities and any manipulative or deceptive device or contrivance in contravention of the Regulations. The prohibition under Regulation 4(2)(q) of the SEBI (Prohibition of Fraudulent and Unfair Trade Practices relating to Securities Market) Regulations, 2003 (“PFUTP Regulations”) specifically covers the acts of ‘front running’. The wide definition of the terms fraud and fraudulently in Regulation 2(1)(c) and all-inclusive prohibitions under Section 12 A of the SEBI Act and Regulation 3 of the PFUTP Regulations encompass within their ambit this kind of market abuse. Apart from these prohibitions, Regulation 4(1) of the PFUTP Regulations prohibits any kind of manipulative, fraudulent or an unfair trade practice in securities markets. An act of front running or tailgating being a form of illegal market abuse is a heinous fraud prohibited under the SEBI Act and PFUTP Regulations and is squarely covered within the ambit of prohibitions contemplated in Section 11(2)(e) and 12A of the SEBI Act and Regulations 3 and 4 of the PFUTP Regulations.
Order in respect of Front Running of Trades of Big Client by certain entities of Chaturvedi Group Page 4 of 77 knowing that when the information becomes public, the price of the securities will change in a predictable manner. This practice is illegal. Front-running can occur in ways. For example, a broker or analyst who works for a brokerage firm may buy shares in a company that the firm is about to recommend as a strong buy or in which the firm is planning to buy a large block of shares.
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Source: SecMarx — sebi:QJA/SS/IVD-2/ID19/32297/2025-26. 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.