Description

SEBI issued an enforcement order against 7 noticees including Prijesh Kurani and associates for front running trades of big client Anustup Trading Private Limited during January 2022 to February 2023.

Summary

SEBI issued an order under Sections 11(1), 11(4), 11(4A), 11B(1), 11B(2) read with Section 15HA of the SEBI Act, 1992 and Rule 5 of the SEBI (Procedure for Holding Inquiry and Imposing Penalties) Rules, 1995, against 7 noticees for front running trades of big client Anustup Trading Private Limited. The investigation covered the period January 1, 2022 to February 28, 2023.

Key Points

  • SEBI investigated suspected front running of trades by Prijesh Kurani and associates during January 1, 2022 to February 28, 2023
  • Seven noticees were identified, comprising the main front runner, family members acting as trading entities, and two information carriers
  • The Big Client (BC) whose trades were front-run was Anustup Trading Private Limited
  • Vilpa Vora (Noticee 6), Authorized Person of Marfatia Broking Pvt. Ltd., is identified as the suspected information carrier who handled BC orders
  • Pranav Vora (Noticee 7), husband of Vilpa Vora, operated her trading terminal and communicated with clients and dealers
  • The front running entities (Noticees 1–5) are closely related family members: Prijesh Kurani, his father-in-law, mother-in-law, mother, and wife
  • WhatsApp communication between Prijesh Kurani and Pranav Vora forms part of the basis of connection

Regulatory Changes

No new regulatory changes introduced. This is an enforcement action under existing provisions of:

  • SEBI Act, 1992 (Sections 11(1), 11(4), 11(4A), 11B(1), 11B(2), 15HA)
  • SEBI (Prohibition of Fraudulent and Unfair Trading Practices in Securities Market) Regulations, 2003 (PFUTP Regulations)
  • SEBI (Procedure for Holding Inquiry and Imposing Penalties) Rules, 1995 (Rule 5)

Compliance Requirements

  • The noticees are subject to penalties and directions as specified under the order
  • Brokers and Authorized Persons are reminded of their obligations to prevent misuse of client order information
  • Authorized Persons handling large client orders must not pass on non-public order information to third parties

Important Dates

  • Investigation Period: January 1, 2022 to February 28, 2023
  • Order Date: April 30, 2026

Impact Assessment

This enforcement action reinforces SEBI’s commitment to prosecuting front running, a serious form of market fraud. The case highlights risks associated with Authorized Persons (APs) who have access to large client order flows. It signals heightened scrutiny of communication channels (including messaging apps like WhatsApp) between broking intermediaries and traders. Broader market impact is limited to the specific parties involved, but the order serves as a strong deterrent to similar misconduct across the broking ecosystem.

Impact Justification

SEBI enforcement order invoking serious provisions including Section 11B and 15HA of the SEBI Act against 7 entities for front running, a form of securities fraud that undermines market integrity.