Description

SEBI final order under Sections 11 and 11B of SEBI Act against 13 entities including Ashish S Parekh for front running trades of a big client (Paresh N Bhagat).

Summary

SEBI issued a final order against 13 entities for front running violations. The matter originated from NSE’s preliminary examination report identifying Mr. Ashish S Parekh and 10 connected entities allegedly engaged in front running the trades of Mr. Paresh N Bhagat (Big Client). The order was passed under sub-sections (1), (4) and (4A) of Section 11 and sub-sections (1) and (2) of Section 11B of the SEBI Act, 1992.

Key Points

  • 13 noticees identified including 9 Front Runners and 4 Information Carriers
  • Front Runners: Ms. Dipa Ashish Parekh, Ms. Kashmira Joshi, Mr. Nikhil Hirachand Jain, M/s Nikhil Hirachand Jain HUF, M/s Alpesh Hirachand Jain HUF, M/s Nagendra S Dubey HUF, Late Ms. Sushma Nagendra Dubey (through legal heirs), Ms. Jagruti Atul Pithadia, Mr. Sahil Atul Pithadia
  • Information Carriers: Mr. Ashish S Parekh, Mr. Rajesh Joshi, Mr. Nagendra S Dubey, Mr. Chirag Atul Pithadia
  • Investigation found prima facie violations of SEBI Act and SEBI (Prohibition of Fraudulent and Unfair Trade Practices) regulations
  • Big Client identified as Mr. Paresh N Bhagat whose Non-Public Information (NPI) was allegedly used for front running
  • Interim ex parte orders and confirmatory orders were issued during the proceedings
  • Order addresses connections amongst big client, information carriers and front runners
  • Trading patterns of front runners analyzed in detail

Regulatory Changes

No new regulatory changes introduced. This is an enforcement order applying existing provisions of SEBI Act, 1992 and SEBI (Prohibition of Fraudulent and Unfair Trade Practices) regulations.

Compliance Requirements

  • Noticees subject to directions issued under the final order
  • Unlawful gains made by noticees calculated and addressed in the order
  • Entities prohibited from certain activities as per Section 11 and 11B directions
  • Legal heirs of Late Ms. Sushma Nagendra Dubey included in enforcement action

Important Dates

  • Order Reference: WTM/KV/IVD-2/ID18/31968/2025-26
  • Order relates to January 2026
  • Investigation initiated based on NSE’s preliminary examination report
  • Interim ex parte orders and confirmatory orders issued prior to final order

Impact Assessment

This enforcement action demonstrates SEBI’s strict approach to front running and misuse of non-public information. The involvement of 13 connected entities including HUFs and family members shows the comprehensive nature of the investigation. The order serves as a strong deterrent against manipulative trading practices and reinforces market integrity. The calculation of unlawful gains and directions under Sections 11 and 11B indicate potential monetary penalties and market access restrictions for the noticees. This case highlights the importance of information barriers and compliance with fair trading practices in securities markets.

Impact Justification

Major enforcement action involving front running violations with 13 noticees, unlawful gains calculation, and orders under Sections 11 and 11B of SEBI Act. Demonstrates strict regulatory action against manipulative trading practices.