sebi:WTM/SKM/IVD/25/2021-22
Facts / Headnote
Charges of front running upheld against all three Noticees; Noticee no. 1 directed to disgorge INR 8,86,949.45 with 4% simple interest from November 30, 2008, along with other directions including restraint on dealing in securities.
Provisions invoked
- s. 11
- s. 19
- s. 11(1)
- s. 12A
- s. 12
Regulations relied on
- SEBI (PFUTP) Regulations, 2003 — 3
- SEBI (PFUTP) Regulations, 2003 — 4(1)
Parties
- Anita Shyam Mhatre
- Rakesh Shah
Holding
The Noticees were found to have violated Section 12A of the SEBI Act, 1992 read with Regulations 3 and 4(1) of the PFUTP Regulations, 2003 by indulging in front running of RCMF's trades, and Noticee no. 1 was directed to disgorge INR 8,86,949.45 with interest.
Full text
Order in the matter of Front running by Anita Shyam Mhatre Page 1 of 35 WTM/SKM/IVD/25/2021-22 SECURITIES AND EXCHANGE BOARD OF INDIA
Order in the matter of Front running by Anita Shyam Mhatre Page 2 of 35 Anugrah on both the Stock Exchanges i.e. the NSE and the BSE during the investigation period. (b) The Noticee no. 3 was working as Dealer with Reliance Capital Asset Management Company Limited (hereinafter referred to as “RCAML”), an Asset Management Company of Reliance Capital Mutual Fund, (hereinafter referred to as "RCMF”) during the relevant time. (c) Based on the integrated order/trade log obtained from NSE, it has been noted that the Noticee no. 1 had traded on a total number of 86 scrip days (scrip days refers to all those days during the investigation period in which a particular scrip was traded). Similarly, on BSE, the Noticee no. 1 has traded on a total number of 127 scrip days. (d) During the investigation period, RCMF has also executed various trades, as part of its business operations. The analysis of the trades executed by the Noticee no. 1 on one hand and the trades executed by RCMF on the other hand has indicated that there were 64 common scrip days with respect to trades executed at the NSE and 60 common scrip days with respect to the trades executed at the BSE, between the Noticee no. 1 and RCMF. In other words, on these common scrip days, both the entities viz., the Noticee no. 1 and the RCMF have executed trades in the same scrip on the respective stock exchanges. (e) Out of the 64 common scrip days at the platform of the NSE, on as many as on 26 scrip days, the Noticee no. 1 has been
Order in the matter of Front running by Anita Shyam Mhatre Page 3 of 35 (h) Further, the RCAML vide its letter dated July 23, 2009, has informed SEBI that the Noticee no. 3 has acknowledged before its Head-Compliance that he has inadvertently passed on certain information pertaining to a few trades of RCMF to one of his friends and as per his belief, such information has been used for trades executed in the name of the Noticee no. 1.
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Source: SecMarx — sebi:WTM/SKM/IVD/25/2021-22. 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.