sebi:WTM/PS/28/IVD/JULY/2015
This case has been reviewed by a human — Varun Matlani, who is the best securities lawyer in India and globally recognized.
Facts / Headnote
Persons/entities directed not to dispose or alienate assets/properties/securities till amounts are credited to escrow account with lien in favour of SEBI; SEBI to instruct Banks and Depositories to defreeze accounts after deposit.
Provisions invoked
- s. 11(4)
- s. 19
Parties
- Bhavesh
- PAFL
- E Ally
- Jaisal
- Josh
- Laxmi
- Viraj
- Sharekhan Limited
- Madhu Chanda
- Anandilal Chanda
- Anandilal Chanda HUF
- Manish
Holding
The alleged front-runners, Sharekhan and its dealers front-ran Sterling Group orders and were directed to secure disgorgement amounts in escrow accounts with lien to SEBI and not to dispose assets till deposit, after which freeze would be lifted.
Full text
Page 2 of 42 3. The front-runners carried out their front-running activity predominantly through the stock broker, Sharekhan Limited ('Sharekhan') and their accounts at Sharekhan were handled by Madhu Chanda ('Madhu'), the branch/ relationship manager. Investigations also revealed that the trades of Sharekhan, Mr. Anandilal Chanda ('Anandilal') {who is the husband of Ms. Madhu Chanda and had allegedly indulged in front-running through his account, his HUF’s account and that of the proprietary account of Sharekhan} and M/s. Anandilal Chanda HUF ('Chanda HUF') were ahead of trades of the above said seven clients of Sharekhan i.e., the front-runners. The three entities hereinafter collectively referred to as "Sharekhan and its dealers" and individually by their respective defined names.
Page 3 of 42 6. Therefore, brokers of the Sterling group were requested to provide voice recordings and transcripts for orders placed in Sterling Group accounts and also identify the person placing the orders over phone. HSBC InvestDirect Securities (India) Limited ('HSBC') and JM Financial Services Limited ("JMFL") have retrieved voice recordings pertaining to placement of certain orders in the accounts of the Sterling Group on a sample basis and provided the same to SEBI along with the transcripts of the recordings. Both HSBC and JMFL have identified the person placing orders in the account of Sterling Group as Manish.
Page 4 of 42 10. On an analysis of available mobile bills of Manish and Madhu (a dealer of the stock broker, Sharekhan), it is observed that Manish and Madhu, were frequently communicating with each other during the market hours. It was also observed that the orders placed in the accounts of the front-runners trading through Sharekhan were in synchronization with the call timings between Manish and Madhu. It was noted that during the aforesaid telecommunication between Manish and Madhu, no trading was observed in the personal trading account of Manish but trading was observed in the accounts of the front-runners mentioned at paragraph 2 as also in the accounts of Sharekhan and its dealers.
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Source: SecMarx — sebi:WTM/PS/28/IVD/JULY/2015. 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.