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SEBI Cracks Down on Front Running at PNB MetLife

23 December 20243 mins read by Angel One
SEBI has issued an interim order barring Sachin Dagli and nine associated entities from participating in the securities market.
SEBI Cracks Down on Front Running at PNB MetLife
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The market regulator Securities Exchange Board of India (SEBI) has identified a case of front-running involving an equity dealer from PNB Metlife India Insurance. The dealer, Sachin Dagli, along with his associates, illicitly gained profits over a span of 3 years through unauthorised trading activities.

As a result of the findings, SEBI has issued an interim order barring Sachin Dagli and nine associated entities from participating in the securities market. Additionally, they have been instructed to disgorge the profits gained through these illegal activities.

SEBI has also directed banks, mutual funds, and depositories to block the accounts of the nine entities involved until further notice. This action aims to prevent any further manipulation or illegal activity related to the case.

Investigation and Findings

SEBI’s surveillance system flagged suspicious trading activity related to PNB MetLife. Upon investigation, it was revealed that Sachin Dagli shared confidential trade information with his associate, Sandeep Shambharkar. Shambharkar then relayed the information to Tejas Dagli, Sachin’s brother. The group used this insider information to profit by buying stocks before large trades by PNB MetLife and selling them once the trades were executed.

In other instances, they engaged in short selling, positioning themselves to profit when PNB MetLife’s sell orders caused stock prices to fall.

PNB MetLife’s Response

As per reports, PNB MetLife issued a statement expressing its full cooperation with SEBI in the investigation. The company confirmed that it had taken disciplinary action in line with internal processes. PNB MetLife also emphasized its commitment to corporate governance, transparency, and integrity, thanking SEBI for its efforts in resolving the matter.

Conclusion

The case underscores the importance of market integrity and the role of regulators like SEBI in ensuring that all market participants adhere to legal and ethical standards. PNB MetLife has reaffirmed its commitment to upholding these values.

 

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.

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