The investigation by the market regulator revealed that the front-running scheme exploited non-public information (NPI) from a major US-based foreign portfolio investor (FPI), referred to as the "Big Client".
How did Ketan Parekh's front-running scheme unfold?
According to Sebi's findings, Parekh and Salgaocar leveraged insider information about the Big Client's large stock transactions to execute fraudulent trades. Salgaocar acted as a key intermediary, passing sensitive trade data to Parekh, who then used it to orchestrate manipulative trades despite being banned from trading for 14 years following his involvement in the 2001 stock market crash.
The operation also involved six entities, referred to as frontrunners, which carried out trades based on the leaked information. Sebi's probe identified intermediaries, including Nuvama Wealth Management Ltd and Motilal Oswal Financial Services Ltd, as channels through which the Big Client's trade data was misused.
This story is from the January 04, 2025 edition of Business Standard.
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This story is from the January 04, 2025 edition of Business Standard.
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