Description

SEBI issues Notice of Demand under Recovery Certificate No. 8994 of 2026 against Vaibhav Dhadda, Alka Dhadda, and Arushi Dhadda for violations related to front running in various funds of Fidelity Group.

Summary

SEBI has issued a Notice of Demand under Recovery Certificate No. 8994 of 2026 against three individuals - Vaibhav Dhadda, Alka Dhadda, and Arushi Dhadda - in connection with front running violations related to various funds of Fidelity Group. This enforcement action is part of SEBI’s ongoing efforts to maintain market integrity and prevent manipulative trading practices that undermine investor confidence.

Key Points

  • Recovery Certificate No. 8994 of 2026 issued against three named individuals
  • Violations relate to front running activities involving Fidelity Group funds
  • Named parties: 1. Vaibhav Dhadda, 2. Alka Dhadda, 3. Arushi Dhadda
  • Front running is a serious market manipulation offense where traders use advance knowledge of pending orders to profit illegally
  • Notice of Demand indicates SEBI is seeking to recover monetary penalties/disgorgement from the violators
  • This action demonstrates SEBI’s commitment to detecting and punishing front running activities

Regulatory Changes

No new regulatory changes introduced. This is an enforcement action under existing SEBI regulations prohibiting front running and market manipulation.

Compliance Requirements

  • The named individuals (Vaibhav Dhadda, Alka Dhadda, Arushi Dhadda) are required to comply with the Notice of Demand
  • Payment of specified amounts must be made as per the recovery certificate terms
  • Market intermediaries and fund managers should review and strengthen internal controls to prevent front running
  • Enhanced surveillance and monitoring of trading patterns around large institutional orders recommended
  • Brokers and dealers should ensure compliance with SEBI’s code of conduct provisions prohibiting front running

Important Dates

  • Certificate Issue Date: 2026 (specific date to be confirmed from full order)
  • Compliance deadline for payment/response will be specified in the order
  • Parties may have limited time to appeal or seek clarification

Impact Assessment

Market Impact: Medium - This enforcement action primarily affects the named individuals and does not directly impact broader market operations. However, it sends a strong deterrent message to market participants.

Regulatory Impact: High - Reinforces SEBI’s zero-tolerance approach toward front running and market manipulation. Demonstrates effective use of recovery certificate mechanism for enforcement.

Investor Impact: Positive - Protection of investor interests by punishing those who exploit advance information for personal gain at the expense of fund investors.

Industry Impact: Market intermediaries, particularly those handling large institutional orders, should review and enhance their surveillance systems and internal controls to detect and prevent front running activities. This case serves as a reminder of the serious consequences of such violations.

Precedential Value: Adds to SEBI’s enforcement track record on front running cases, which is critical for maintaining market integrity and fair trading practices.

Impact Justification

High importance due to serious market integrity violation (front running) with enforcement action. Medium market impact as it affects specific individuals rather than systemic market operations, but highlights SEBI's continued crackdown on front running activities.