Sebi Front-Running Case: Rs 96 Lakh Settlement

New Delhi, Nov 20 (PTI) Atul Gopeshwar Chaturvedi, who was a trader at Antique Stock Broking Ltd, has settled with markets regulator Sebi a case of suspected front-running of trades of Societe Generale after paying Rs 96 lakh.

Apart from the settlement amount, Chaturvedi disgorged wrongful gains of Rs 1.48 crore made by his family members and friends. Additionally, he will voluntarily undertake a six-month debarment from the securities market from the date of the settlement order.

Front-running refers to an illegal practice in the stock market where an entity trades based on advanced information from a broker or analyst before the information has been made available to its clients.

In its order on November 18, Sebi "ordered that any proceedings that may be initiated for the violations...are settled in respect of the applicant (Chaturvedi)".

Sebi had conducted an investigation to ascertain whether any front-running activities were carried out in respect of the impending trades of Societe Generale (Big Client) during the investigation period from January 1, 2022, to December 8, 2023.

During the investigation, the regulator noted that the Big Client had placed its orders through Antique. Out of the 350 instances of front running identified, in 348 instances, the sales trader from Antique was the applicant.

In his capacity as a sales trader at Antique, Chaturvedi was privy to material non-public information pertaining to the impending trades of the Big Client.

He transmitted such information to his family members and friends, who earned wrongful gains of Rs 1.23 crore by front-running the trades of the Big Client. Further, he had front-run the trades of the Big Client using the trading account of his brother-in-law, Sebi noted.

The order came after Chaturvedi filed a suo-motu settlement application with Sebi proposing to settle by neither admitting nor denying the findings of fact and conclusions of law.