The Securities and Exchange Board of India (SEBI) has disposed of a case against Sanjay Sanghvi, after he agreed to pay Rs.15 lakh and take a 3-year voluntary debarment from the market to settle charges of fraudulent and unfair trade practices in the alleged front-running in shares traded by HDFC Mutual Fund.
SEBI said that the settlement, which has been reached “without admission or denial of guilt”, would apply to the charges levelled against Mr. Sanghvi in this matter alone.
SEBI had conducted an investigation into the alleged ‘front-running’ activities that had taken place in a number of shares traded by HDFC Asset Management Company (AMC). Front-running is an illegal market practice, wherein shares are traded based on prior information about the trading calls to be taken by institutional and other large investors.
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The regulator said that the consent order was without prejudice to its right “to initiate enforcement actions, including commencing or reopening of the proceedings pending against the applicant,” if any representation made by him is subsequently discovered to be untrue, or the applicant breaches any of the consent terms or undertakings.
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