Description

Securities Appellate Tribunal order dated December 15, 2025 in Appeal No.459 of 2022 concerning front running of Fidelity Group funds involving disgorgement, penalties and market debarment directives.

Summary

The Securities Appellate Tribunal (SAT) issued an order on December 15, 2025 in three consolidated appeals (Appeal No.459 of 2022, Appeal No.556 of 2022, and Appeal No.557 of 2022) challenging SEBI’s Whole Time Member order dated June 3, 2022. The case involves front running of various Fidelity Group funds. The appellants include Sumit Kanungo, Riya Jain, Alka Dhadda, Arushi Dhadda, and Vaibhav Dhadda. SEBI’s original order directed disgorgement of amounts, imposed penalties, and debarred the appellants from accessing securities markets for specified periods.

Key Points

  • SAT heard three consolidated appeals against SEBI’s June 3, 2022 order on front running allegations
  • Appellants: Sumit Kanungo, Riya Jain (Appeal 459/2022), Alka Dhadda and Arushi Dhadda (Appeal 556/2022), Vaibhav Dhadda (Appeal 557/2022)
  • Original SEBI order directed disgorgement, penalties under para 87(iv), and market debarment under para 87(vii) and (viii)
  • Case involves front running of Fidelity Group mutual fund schemes
  • Appeals were heard on August 6, 2025 and reserved for orders
  • SAT order pronounced on December 15, 2025
  • Tribunal coram: Justice P.S. Dinesh Kumar (Presiding Officer), Ms. Meera Swarup (Technical Member), Dr. Dheeraj Bhatnagar (Technical Member)

Regulatory Changes

No new regulatory changes introduced. This circular disseminates an existing SAT order for information and compliance by market participants.

Compliance Requirements

  • Market participants must note the SAT’s directions regarding the appellants
  • The specific disgorgement amounts, penalties, and debarment periods are detailed in the original SEBI order para 87
  • Entities must ensure compliance with any trading restrictions or debarment orders affecting the named individuals

Important Dates

  • June 3, 2022: Original SEBI WTM order passed
  • 2022: Appeals filed (Appeal No.459, 556, and 557 of 2022)
  • August 6, 2025: Appeals heard and reserved for orders
  • December 15, 2025: SAT order pronounced
  • February 6, 2026: BSE circular issued disseminating the SAT order

Impact Assessment

This order reinforces SEBI’s enforcement actions against front running activities and market manipulation. The case sets a precedent for handling front running allegations involving mutual fund schemes. While the immediate impact is limited to the specific individuals involved, it serves as a deterrent for similar manipulative practices. Market participants should note the serious consequences including disgorgement of illegal gains, substantial penalties, and lengthy market debarment for engaging in front running activities. The involvement of multiple family members (Dhadda family) and associates suggests coordinated trading activity that attracted regulatory scrutiny.

Impact Justification

SAT order in front running case with disgorgement and debarment orders. Affects specific individuals rather than broad market impact, but significant for enforcement precedent.