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The Securities and Exchange Board of India (SEBI) has banned nine entities, including PNB MetLife India Insurance Company equity dealer Sachin Bakul Dagli, for engaging in front-running. This scheme generated illegal gains of over Rs 21 crore. The front-running activities continued for more than three years, from January 1, 2021, to July 19, 2024.
SEBI conducted an investigation into suspected front-running of trades by PNB MetLife India Insurance Company. The focus was to determine if the suspected entities had front-run the trades of PNB MetLife in connivance with other entities, including dealers and/or fund managers, thereby violating SEBI’s Prohibition of Fraudulent and Unfair Trade Practices (PFUTP) rules and SEBI Act.
SEBI found that Sachin Bakul Dagli and his brother Tejas Dagli accessed confidential, non-public information about impending trade orders of PNB MetLife and Investec’s institutional clients. They used this information to make trading decisions and shared it with Sandeep Shambharkar, who executed front-running trades through the accounts of Dhanmata Realty Pvt Ltd (DRPL), Worthy Distributors Pvt Ltd (WDPL), and Pragnesh Sanghvi.
Directors of DRPL and WDPL, including Arpan Kirtikumar Shah, Kabita Saha, and Jignesh Nikulbhai Dabhi, were also involved in facilitating this scheme. This group colluded to create and execute a fraudulent front-running scheme, violating the SEBI Act and PFUTP Regulations, resulting in unlawful profits.
SEBI noted 6,766 instances of such front-running trades in the accounts of DRPL, WDPL, and Pragnesh Sanghvi, resulting in unlawful gains of Rs 21,15,78,005. SEBI has restrained these entities from buying, selling, or dealing in securities, either directly or indirectly, until further orders. Additionally, SEBI has impounded the total unlawful gains of Rs 21,15,78,005 from the nine entities.
