Authority: Amarjeet Singh, Whole Time Member, Securities and Exchange Board of India

Order Date: July 24, 2026

Case Overview

The proceedings emanate from an Interim Order cum Show Cause Notice dated April 23, 2025, following an investigation by SEBI into front-running activities by Madhav Stock Vision Pvt. Ltd. (MSVPL) and five individuals. The investigation period covered April 1, 2020, to December 1, 2023, focusing on alleged front-running of trades of a large institutional client identified as Life Insurance Corporation of India (LIC).

SEBI's investigation revealed that Noticees 2 and 3 (Jyotiswaroop Nandkishore Purohit and Pankit Bhagwati Jhaveri), who were dealers at Bhagwandas Gordhandas Financial Pvt. Ltd. (BGFPL), obtained non-public information about LIC's impending orders through their proximity to dealing desks of other LIC-empaneled brokers. They allegedly eavesdropped on conversations and accessed email communications containing order details. This information was then passed to Noticees 4 and 5 (Rajesh Bhagwati Jhaveri and Ajay Sampatraj Jain) at MSVPL, who executed front-running trades in MSVPL's proprietary account using both Buy-Buy-Sell and Sell-Sell-Buy strategies.

The scheme involved 1,693 instances of front-running in the equity cash segment, generating unlawful gains of ₹2.51 crore. Evidence included call data records showing extensive communication between the noticees, recorded conversations demonstrating real-time sharing of order information, WhatsApp chats sharing broker terminal credentials, and bank statements showing profit sharing through salary payments to family members of the noticees.

Final Outcome

SEBI found all six noticees guilty of violating Section 12A(a), (b), and (c) of the SEBI Act read with Regulation 3(a), (b), (c), (d) and Regulation 4(1) and 4(2)(q) of the PFUTP Regulations. The following directions were issued:

1. Market Ban: Noticee 1 (MSVPL) is restrained from accessing the securities market and prohibited from buying, selling, or dealing in securities in its proprietary account for one year. Noticees 2 to 6 are similarly restrained from market access for one year.

2. Disgorgement: The noticees must jointly and severally disgorge unlawful gains of ₹2,51,15,698.30 along with simple interest at 12% per annum from December 1, 2023 (end of investigation period) to April 24, 2025 (date of lien creation). The amount must be remitted to SEBI's Investor Protection and Education Fund within 45 days.

3. Penalties: Each noticee is imposed a penalty of ₹5,00,000 under Section 15HA of the SEBI Act, payable within 45 days.

The order allows noticees to close any open derivative positions within 3 months from the order date or at contract expiry, whichever is earlier.

Topics: Front-running, Market Manipulation, Regulatory Enforcement