Description
SEBI releases recovery certificate against Sumit Kanungo, Riya Jain (Kanungo), Alka Dhadda, Arushi Dhadda and Vaibhav Dhadda in the matter of front running involving Fidelity Group funds.
Summary
SEBI has issued a release order for Recovery Certificate No. 8627 of 2025 against five individuals - Sumit Kanungo, Riya Jain (Kanungo), Alka Dhadda, Arushi Dhadda, and Vaibhav Dhadda - in connection with front running activities involving various funds of the Fidelity Group. This enforcement action demonstrates SEBI’s continued efforts to maintain market integrity and prevent fraudulent trading practices.
Key Points
- Recovery Certificate No. 8627 of 2025 issued against five individuals
- Case involves front running in relation to Fidelity Group funds
- Named entities: Sumit Kanungo, Riya Jain (Kanungo), Alka Dhadda, Arushi Dhadda, and Vaibhav Dhadda
- Enforcement action under SEBI’s recovery and compliance framework
- Release order indicates progression of recovery proceedings
Regulatory Changes
No new regulatory changes introduced. This is an enforcement action under existing SEBI regulations governing front running and market manipulation.
Compliance Requirements
- The named individuals are subject to recovery proceedings under the certificate
- Market participants should note SEBI’s strict enforcement stance on front running activities
- Entities must ensure robust compliance systems to prevent front running and similar manipulative practices
- Intermediaries handling fund transactions should strengthen surveillance mechanisms
Important Dates
- Recovery Certificate Date: 2025
- Release Order Date: January 2026
- Certificate Number: RC 8627 of 2025
Impact Assessment
Market Impact: Medium - This enforcement action serves as a deterrent against front running practices but is limited to specific individuals and does not directly impact broader market operations or structure.
Regulatory Impact: High - Demonstrates SEBI’s proactive enforcement approach in detecting and penalizing front running activities, particularly those involving institutional fund transactions.
Compliance Impact: Market intermediaries, fund managers, and dealers should review their internal surveillance systems and compliance protocols to ensure detection and prevention of front running activities. The involvement of Fidelity Group funds highlights the need for robust systems at institutional level.
Impact Justification
High severity enforcement action involving front running allegations with recovery certificate issued against multiple individuals. Medium market impact as it affects specific entities rather than broader market structure.