The consent terms proposed by Kasat were placed before the HPAC and after deliberation, it had recommended the case for settlement on the consent terms as proposed by Kasat. However, passing of this order is without prejudice to the right of Sebi to take enforcement action against the applicant (Kasat,) if it finds that any representations made by the applicant in the consent proceedings are subsequently discovered to be untrue, the Sebi order said.
Sebi conducted an investigation into the matter of irregularity in the trading in the Bilt stock, wherein it was observed that Kasat was seen to be passing on information to certain individuals, regarding the impending large sales to be carried out by an institutional client. These individuals, in turn, short sold the stock in large quantities prior to the large sale orders and bought them subsequently at lower prices.
It was alleged that Kasat had indulged in customised front running and had thereby violated the various provisions of Sebi (FUTP) Regulations. Following the preliminary investigations and pending detailed investigations, Sebi passed an interim order in October 2007 against Kasat and directed him not to buy, sell or deal in securities, directly of indirectly, till further directions in this regard.