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Informist, Friday, Sep 27, 2024

--Angel One settles front-running probe by SEBI for 2.16 mln rupees

MUMBAI – Angel One Ltd has settled a probe by the Securities and Exchange Board of India on alleged front running by one of the authorised persons of the broking firm by paying a settlement amount of 2.16 mln rupees. The market regulator had issued a show cause notice to Angel One on Apr 24 regarding the breach of the Prohibition of Fraudulent and Unfair Trade Practices Regulations and other regulatory provisions, according to a settlement order issued by SEBI today.

SEBI had alleged that Jitendra Kewalramani, an authorised person of Angel One, was placing orders ahead of some big clients of the brokerage and squaring off the same after the orders from clients. The show cause notice said Angel One failed to maintain a proper record of the execution of trades of clients by recording orders placed by the clients through its authorised persons and maintaining order sheets with a time stamp.

SEBI said as per its circular on market access through authorised persons, the brokerage was responsible for all acts of omission and commission by authorised persons and employees, including liabilities arising from it. According to SEBI, authorised persons are individuals, partnership firms, or corporate bodies, who are appointed by a broker and who provide access to the stock exchange trading platform as an agent of the brokerage.

Till 2018, when SEBI discontinued the category, even sub-brokers had a similar role. Sub-brokers were required to register with SEBI, unlike authorised persons who only needed to seek approval from the stock exchanges.

According to the settlement order, trades of Bharat Kanaiyalal Sheth Family Trust, among the big clients of Angel One, were allegedly preceded by trades by Kewalramani and other unnamed entities. SEBI's probe pertained to the period from Jan 1, 2021, to Oct 31, 2022, according to the order.

Kewalramani, according to the SEBI order, was directly or indirectly in possession of details of the impending orders to be placed by the big clients. These trades were allegedly executed in his own trading account and in the trading accounts of certain other unnamed entities who were related or associated with him.  End

Reported by Rajesh Gajra

Edited by Saji George Titus

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