Front-running is a serious issue in the financial markets, and recent cases have brought this illegal practice into the spotlight once again. In a front-running scheme, a trader or fund manager takes advantage of their knowledge of upcoming trades from institutional clients to profit at their expense.
One recent case involves big fish Ketan Parekh, who, along with other entities, was found to have orchestrated a front-running scheme targeting a US-based fund house managing around $2.5 trillion. This illegal activity led to wrongful gains of around ₹66 crore being impounded by the market regulator SEBI.
Unfortunately, front-running is not limited to just one or two instances. In another case, PNB MetLife India Insurance Company equity dealer Sachin Bakul Dagli and eight other entities were found to have engaged in front-running, generating illegal gains of ₹21.16 crore over a period of three years.
Even more concerning is the fact that habitual offenders like Ketan Parekh, who was previously involved in the infamous stock market scam of 2000, continue to find ways to exploit the system. This raises questions about the efficacy of regulatory measures in preventing such scams and protecting the interests of investors.
While SEBI has been diligent in pursuing cases of front-running, the repeated instances of such illegal activities undermine investor confidence in the market. It is crucial for the regulator to take strict action against offenders and ensure that the market remains fair and transparent for all participants.
In conclusion, the menace of front-running continues to pose a threat to the integrity of the financial markets. It is imperative for regulatory authorities to address this issue effectively and hold perpetrators accountable to maintain trust and confidence in the market.
