sebi:WTM/PS/26/IVD/ID-6/JULY/2014
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Facts / Headnote
Violations established against noticees for fraudulent front-running of HDFC Mutual Fund orders; Noticees 2, 3 and 4 directed to disgorge with interest and prohibited from securities market; Noticee No.1 prohibited from dealing/association; Trustees of HDFC Mutual Fund directed to overhaul internal controls.
Provisions invoked
- s. 11B
- s. 11
- s. 19
- s. 12A
- s. 17
- s. 4(2)
Regulations
- Reg. 11
- Reg. 3
- Reg. 4
- Reg. 2(1)(c)
- Reg. 4(1)
- Reg. 2
- Reg. 4(2)(q)
- Reg. 25(16)
Parties
- Mr. Nilesh Kapadia (Noticee No.1)
- Mr. Rajiv Ramniklal Sanghvi (Noticee No.2)
- Mr. Chandrakant P. Mehta (Noticee No.3)
- Ms. Dipti Paras Mehta (Noticee No.4)
Holding
SEBI held that Nilesh Kapadia tipped HDFC AMC order details to Rajiv Sanghvi who front-ran them through accounts of himself, Chandrakant Mehta and Dipti Mehta, and directed disgorgement with interest, market prohibition till further orders, and overhaul of HDFC AMC internal controls.
Full text
Page 2 of 59 "12. Under these circumstances, I, in exercise of the powers conferred upon me under Section 19 of the Securities and Exchange Board of India Act 1992, read with Sections 11, 11B and 11(4)(b) thereof and Regulation 11 of Securities and Exchange Board of India (Prohibition of Fraudulent and Unfair Trade Practices Relating to Securities Market) Regulations, 2003, by way of this ad interim ex-parte order, hereby direct as follows:
Page 3 of 59 2. Pursuant to the passing of the interim order, further investigation in the matter was continued, which inter alia revealed that few trades were also executed in the account of one Mr. Sanjay Ramniklal Sanghvi (who is the younger brother of Mr. Rajiv Sanghvi).
Page 4 of 59 Chandrakant Mehta shall also be referred to as noticee no. 3 and Ms. Dipti Mehta shall also be referred to as noticee no. 4.
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Source: SecMarx — sebi:WTM/PS/26/IVD/ID-6/JULY/2014. 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.