SEBI Cracks Down on Front-Running: Orders Issued Against Multiple Entities

The Securities and Exchange Board of India (SEBI) has taken decisive action on front-running activities involving orders of a significant institutional client, as per orders issued in October 2025. Front-running violates fair trading practices where entities trade based on advance non-public information on large client orders.

SEBI’s investigation revealed several brokers and associated persons manipulating trades by exploiting confidential data, leading to irrational price and volume movements. Several entities involved have faced penalties, market bans, and directions to disgorge illegal gains. The irregularities also included failure to maintain proper records and enforce internal compliance policies.

The regulator emphasized the need to uphold market integrity and ensure equal access to information for all participants. Such actions aim to safeguard investor interests and maintain trust in the securities markets.

Important Points:

SEBI issued orders against multiple entities for front-running large client trades.

Investigation covered trading activity from January 2022 to December 2023.

Penalties include monetary fines, bans on securities market participation, and disgorgement of illicit profits.

Highlights shortcomings in brokers’ internal controls and compliance enforcement.

SEBI reiterates commitment to market transparency and investor protection.

Sources: NSE Circulars, BSE Filings, SEBI Official Orders, Moneycontrol, Business Standard.