Angel One pays Rs 21.64 lakh to settle allegations of front-running by authorised person

(Representational image)

Leading stock brokerage Angel One has settled allegations of frontrunning of orders of a big client by one of its authorised persons by paying Rs 21,64,500.

The market regulator's settlement order added that the brokerage has also "submitted details of the corrective action/ measures put in place by it to prevent re-occurrence of similar violations."

In a settlement order dated September 27, the Securities and Exchange Board of India (Sebi) said that Angel One's authorised person (AP) named Jitendra Kewalramani was allegedly front-running trades of clients such as Bharat Kanaiyalal Sheth Family Trust (BKS Family Trust) through his own account and through trading accounts of certain other entities.

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Sebi had investigated certain entities between January 1, 2021, and October 31, 2022, "who were consistently placing orders ahead of the Big Clients including Bharat Kanaiyalal Sheth Family Trust (“BKS Family Trust”) in the Equity (cash) segment of NSE and were squaring off the same."

According to the regulator's order, the investigation revealed that Jitendra Kewalramani, who was the Authorised Person (AP) of Angel One Limited was, directly or indirectly, in possession of the details of the impending orders to be placed by the big clients. Accordingly, front running trades were allegedly executed by him in his own trading account and the trading accounts of certain other entities, who were all related / associated to him during the investigation period.

The order added that all the alleged front runners, except two entities, had executed their front running trades through the brokerage. Kewalramani, the AP of the brokerage was alleged to be the main front runner of the front running orders executed. It was observed that the orders executed in the accounts of his clients by the AP were done without maintaining a record of the order instructions given by the clients, as is mandated by Sebi.