Description

SEBI settlement order against Manish Chaturvedi, Ashish Chaturvedi, Rajni Chaturvedi and Indus Strategy Financial Advisors Private Limited for front running activities involving Societe Generale's trades during January 2022 to December 2023.

Summary

SEBI issued settlement order SO/AN/PSD/2025-26/8345 against four applicants - Manish Chaturvedi, Ashish Chaturvedi, Rajni Chaturvedi, and Indus Strategy Financial Advisors Private Limited - for suspected front running of trades of Societe Generale during the investigation period from January 01, 2022 to December 08, 2023. The applicants filed suo-motu settlement applications under SEBI (Settlement Proceedings) Regulations, 2018, proposing to settle without admitting or denying violations of SEBI Act and PFUTP Regulations.

Key Points

  • Four entities filed settlement applications: Manish Chaturvedi (PAN: AEEPC6410J), Ashish Chaturvedi (PAN: AGVPC4973B), Rajni Chaturvedi (PAN: AHEPC1763B), and Indus Strategy Financial Advisors Private Limited (PAN: AACCI4543D)
  • Investigation period: January 01, 2022 to December 08, 2023
  • Alleged violations: Sections 12A(a), 12A(b), 12A(c) and 12A(e) of SEBI Act, 1992 and Regulations 3(a), (b), (c), (d), 4(1) and 4(2)(q) read with Regulation 2(1)(c) of PFUTP Regulations
  • Mr. Atul Gopeshwar Chaturvedi, sales trader at Antique Stock Broking Limited, was involved in 348 out of 350 instances of identified front running
  • Material non-public information was transmitted from Atul Gopeshwar Chaturvedi to family members (Rajni, Manish, and Ashish Chaturvedi)
  • Manish and Ashish Chaturvedi are Directors of Indus Strategy Financial Advisors Private Limited
  • Rajni Chaturvedi’s account: 14 instances of front running with wrongful gains of ₹2,85,751
  • Indus Strategy Financial Advisors: 26 instances of front running with wrongful gains of ₹11,95,936
  • Total wrongful gains: ₹14,81,687
  • Internal Committee meeting held on March 12, 2025 with authorized representatives

Regulatory Changes

No new regulatory changes introduced. This order enforces existing provisions under SEBI Act, 1992 and PFUTP Regulations, 2003 relating to prohibition of fraudulent and unfair trade practices.

Compliance Requirements

  • Entities must refrain from front running activities based on material non-public information
  • Sales traders and market intermediaries must maintain confidentiality of client order information
  • Family members and connected entities of persons with access to privileged information must not trade on such information
  • Market participants must ensure compliance with PFUTP Regulations to prevent market manipulation

Important Dates

  • Investigation Period: January 01, 2022 to December 08, 2023
  • Settlement Application Numbers: 8345/2025, 8348/2025, 8349/2025, 8350/2025
  • Internal Committee Meeting: March 12, 2025

Impact Assessment

This settlement order demonstrates SEBI’s continued enforcement against front running practices and market manipulation. The case highlights the regulatory scrutiny on misuse of material non-public information by market intermediaries and their connected persons. The identification of 350 instances of front running activities involving a big client (Societe Generale) underscores the importance of broker-client confidentiality and information barriers. The settlement mechanism allows violators to resolve proceedings without prolonged litigation while ensuring deterrence through disgorgement of wrongful gains and potential penalties. The case serves as a warning to market participants about consequences of exploiting privileged trading information for personal benefit.

Impact Justification

Settlement order for front running violations involving wrongful gains of ₹14.81 lakhs, demonstrating regulatory enforcement against market manipulation practices