Anand Rathi Share and Stock Brokers Pays Rs90.20 Lakh To Settle Front-running Case with SEBI
Moneylife Digital Team 13 May 2025
Anand Rathi Share and Stock Brokers Ltd has paid Rs90.20 lakh to the Securities and Exchange Board of India (SEBI) to settle adjudication proceedings initiated against it for regulatory violations related to front-running activities in the scrip of KPIT Technologies Ltd.
 
The case revolved around allegations that the brokerage failed to exercise due diligence and maintain transparent and credible records while executing trades placed by Mehrangarh Financial Advisors Pvt Ltd (MFAPL). SEBI’s investigation found that Anand Rathi Share and Stock Brokers had registered the email IDs of employees associated with its own group companies instead of those belonging to MFAPL or its duly authorised representatives. 
 
Furthermore, the broker was accused of processing off-market transfers based on instructions from individuals who were either unauthorised or no longer authorised signatories of MFAPL at the time of the transactions.
 
The adjudication proceedings were initiated under several provisions of the SEBI Act, 1992, the SEBI Prohibition of Fraudulent and Unfair Trade Practices Relating to Securities Market Regulations, 2003, the SEBI Stock Brokers Regulations, 1992, and the SEBI Depositories and Participants Regulations, 1996. 
 
Following the issuance of a show-cause notice (SCN) on 7 March 2024, Anand Rathi Share and Stock Brokers opted to resolve the matter through a settlement mechanism, without admitting or denying the findings. A settlement application was submitted under the SEBI Settlement Proceedings Regulations, 2018. After attending a meeting with SEBI’s internal committee (IC) in August 2024, the broker proposed revised settlement terms.
 
The high-powered advisory committee (HPAC) reviewed the proposal and, in its meeting held on 28 August 2024, recommended that the matter be settled upon payment of Rs90.20 lakh. This recommendation was, subsequently, approved by SEBI’s panel of whole-time members (WTMs) on 12 December 2024 and was officially communicated to the applicant in April 2025. Anand Rathi Share and Stock Brokers confirmed the payment of the settlement amount on 28 April 2025, and SEBI acknowledged receipt.
 
With the settlement amount paid and accepted, SEBI disposed the adjudication proceedings as per the applicable provisions under the SEBI Act and the Settlement Regulations. The order came into immediate effect.
 
However, SEBI says it has retained the right to reopen the case if it is found that the applicant did not make full and true disclosures, violated any undertakings, or if there were discrepancies in the settlement process.
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