Sebi slams Rs 15 crore fine on Sharekhan, others over front-running activities

MUMBAI: The Securities and Exchange Board of India has fined broking firm Sharekhan and some individuals for allegedly doing front-running activities. The regulator has impounded the unlawful gains made by Sharekhan and 15 entities. The total imposed is Rs 14.7 crore.

The regulator said its investigation for the period March 1,2009 to March 31,2011 revealed that some clients of Sharekhan were front-running the orders of the Sterling group and the subsequent orders placed by the front-runners matched almost completely with the orders placed by the Sterling Group.

"The front-runners carried out their front-running activity predominantly through the stock broker, Sharekhan and their accounts at Sharekhan were handled by Madhu Chanda, the branch/ relationship manager," Sebi said.

Sebi's investigations also revealed that the trades of Sharekhan, Mr Anandilal Chanda (who is the husband of Madhu Chanda and had allegedly indulged in front-running through his account,his HUF's account and that of the proprietary account of Sharekhan) and his HUF were ahead of trades of the clients of Sharekhan i.e the front-runners.