SAT sets aside fines on three entities in front running case
The entities were said to be invloved in "front running" related to the orders of foreign fund house Citigroup Global Markets Mauritius Pvt Ltd (CGMMPL) in the shares of Aurobindo Pharma, ICICI Bank and State Bank of India.
Front-running is an illegal practise where a stock broker executes orders on a security for his/her own account, taking advantage of advance knowledge of pending orders. However, in an order dated December 17, SAT set aside the penalties imposed on Sujit Karkera, Shilpa Kotak and Purushottam Karkera on the grounds that the norms only prohibit intermediaries from front running and not individual traders.
"Since the appellants (Sujit, Shilpa and Purushottam) are not intermediaries they cannot be held to have violated the provisions...in front running," SAT said.
SAT has set aside the penalty of Rs 60.73 lakh on Sujit Karkera, Rs 54.19 lakh on Shilpa Kotak and Rs 4.66 lakh on Purushottam Karkera.
In a probe conducted by Sebi it was observed that the entities, while trading through B P Equities were trading ahead of the trades of CGMMPL during October- December, 2008.
The trading was done with prior knowledge of the trades of CGMMPL in Aurobindo Pharma, ICICI Bank and SBI.
According to the probe, the entities had obtained prior knowledge in
Be the first to comment.