The Securities and Exchange Board of India (SEBI) on Thursday (Jan 2) prohibited Parekh and others from buying and selling securities, as well as associating with any entity registered with the regulator, an order published on SEBI’s website showed. 

The regulator investigated trades undertaken by individuals and brokers associated with Parekh over a two-year period ending June 2023, the order said.

SEBI’s investigation showed that Parekh allegedly obtained non-public information of a major US fund’s trades from Singapore-based Rohit Salgaocar, who had an agreement to refer trades of that fund to Motilal Oswal Financial Services Ltd and Nuvama Wealth Management Ltd. Parekh then passed on the information to his associates to front run the trades, SEBI member Kamlesh Varshney said in the order.

Motilal and Nuvama didn’t immediately respond to requests for comment. 

Parekh was earlier banned by SEBI in 2003 for 14 years, on allegations of insider trading, price rigging and illegal diversion of bank funds into the stock market.

His actions triggered a crash in India’s stock market during February and March of 2001. SEBI’s latest move against Parekh comes amid a rise in front-running cases in the country, just as its stock market is booming.

Varshney has also ordered the impounding of about 658 million rupees (US$7.7 million, or RM34.63 million) in “unlawful gains” made by the entities allegedly involved in the scam. Parekh and 21 others named in the SEBI order have been given 21 days to respond to the findings.

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