Mumbai:
Taking strict action in a front-running case, market regulator Securities and Exchange Board of India (SEBI) has banned PNB MetLife India Insurance Company’s equity dealer Sachin Bakul Dagli and eight other entities.
According to SEBI, front running was being done by Sachin Bakul Dagli and eight entities for more than three years and thus all of them together have earned illegal profits of Rs 21.16 crore.
All of them have been banned from the stock market by the market regulator and their illegally earned profits have also been confiscated. Before taking action, SEBI had investigated some suspicious front-running trades related to PNB MetLife India Insurance.
The purpose of this investigation was to investigate whether suspicious entities or other people, including dealers and fund managers, were involved. PNB was front-running in the business of MetLife India Insurance. Also, have SEBI rules been violated during this period?
The investigation, which ran from January 1, 2021, to July 19, 2024, revealed that most of the trading decisions in PNB MetLife were handed over to Sachin Bakul Dagli for execution.
The investigation found that Sachin Bakul Dagli (equity dealer at PNB MetLife) and his brother Tejas Dagli (equity sales trader at Investec) received confidential, non-public information about upcoming trading decisions of institutional clients of PNB MetLife and Investec. .
This information was further used to take trading decisions and shared it with Sandeep Shambharkar, who placed front-running trades through the accounts of Dhanmata Realty Private Limited (DRPL), Worthy Distributors Private Limited (WDPL) and Pragnesh Sanghvi. carry through.
DRPL and WDPL directors Arpan Kirtikumar Shah, Kabita Saha and Jignesh Nikulbhai Dabhi also cooperated to carry out this work. SEBI said that a total of 6,766 front-running trades were done. A profit of about Rs 21,15,78,005 crore has been earned from this.
PNB MetLife said in a statement to IANS, “The company has fully cooperated with the government agencies in this matter. We thank SEBI for coming to the conclusion of fraud by the named person against PNB MetLife. Our internal “In line with procedures, we have taken disciplinary action.”
The company further said, “PNB MetLife is committed to maintaining the highest standards of corporate governance and transparency.”
Front-running is an illegal practice. In this, a trader or broker receives confidential information about a big purchase in a particular stock by a big company or institution and creates his position in that particular stock even before the big order is executed. In such a situation, when the order is executed by a big company or institution, the trader or broker gets the benefit of the sudden rise in that share.
