sebi:WTM/ASB/IVD/ID17/30165/2023-24
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Facts / Headnote
Front-running established against Noticees 1 to 4; proceedings against Noticees 5 and 6 dropped; disgorgement directed to be paid within 45 days
Provisions invoked
- s. 19
- s. 11(1)
- s. 11B
- s. 11
- s. 15H
- s. 15J
- s. 15F
- s. 11(5)
Regulations
- Reg. 3
- Reg. 3(a)
- Reg. 4(2)(q)
Parties
- Mr. Kaushal Chandarana (Noticee 1)
- Mr. Manish Mehta (Noticee 2)
- Banhem Stock Broking Pvt. Ltd. (Noticee 3)
- Ninja Securities Pvt. Ltd. (Noticee 4)
- Ms. Kashmira Mehta (Noticee 5)
- Mr. Sumatilal Mehta (Noticee 6)
Holding
SEBI held Noticees 1-4 liable for front-running the trades of Anvil (Big Client) through Ninja and Banhem and directed disgorgement, while not proceeding against Noticees 5-6.
Full text
- __________________________________________________________________________________ Final Order in the matter of Front Running by Banhem Stock Broking Pvt. Ltd. and Ninja Securities Pvt. Ltd. Page 2 of 37 referred to as “Investigation Period / IP”). The investigation revealed inter alia the following: (a) Anvil operated one PMS scheme namely ‘Long Only Equity Scheme’ (“LOES”). During the Investigation Period, LOES had gross traded value of Rs.3355.07 Crores and had invested in 131 distinct scrips. Anvil had traded mostly through four Trading Members namely, KR Choksey Shares and Securities Pvt. Ltd., Anvil Share & Stock Broking Pvt. Ltd., Dam Capital Advisors Ltd. and Kotak Securities Ltd. (b) During the course of investigation, it was noted that Ninja Securities Pvt. Ltd. (hereinafter referred to as “Ninja / Noticee 4”) and Banhem Stock Broking Pvt. Ltd. (hereinafter referred to as “Banhem / Noticee 3”) had traded in different securities ahead of the impending orders placed on behalf of Anvil. Mr. Manish Mehta (hereinafter referred to as “Manish / Noticee 2”), a common Director of Ninja and Banhem, was connected to the Portfolio Manager of Anvil, Mr. Kaushal Chandarana (hereinafter referred to as “Kaushal / Noticee 1”). (c) The trading pattern of Ninja and Banhem showed that they were executing their orders on the stock exchange ahead of the orders of Anvil (i.e. Big Client) in the equity segment. Subsequently, soon after the Big Client’s orders were placed, Ninja and Banhe
- __________________________________________________________________________________ Final Order in the matter of Front Running by Banhem Stock Broking Pvt. Ltd. and Ninja Securities Pvt. Ltd. Page 3 of 37 5) were the Directors of Ninja and Banhem during the relevant period when the prima facie front-running trades were executed from the trading account of Ninja and Banhem. Being directors and part of management, they were responsible for the acts of Ninja and Banhem. (f) The aforesaid acts of Noticees 1 to 6 were allegedly in violation of provisions of Sections 12A(a), (b) & (c) of SEBI Act, 1992 read with Regulation 3(a), (b), (c), (d), 4(1) and 4(2)(q) of PFUTP Regulations, 2003.
- __________________________________________________________________________________ Final Order in the matter of Front Running by Banhem Stock Broking Pvt. Ltd. and Ninja Securities Pvt. Ltd. Page 4 of 37 opportunity of personal hearing was granted to the Noticees on January 10, 2024, which was attended by Noticees’ authorized representatives.
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Source: SecMarx — sebi:WTM/ASB/IVD/ID17/30165/2023-24. 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.