Capital Group said it was the money manager affected by a front-running case that led India's market regulator to once again ban Ketan Parekh, a former stock broker who shook the nation's market at the turn of the century with one of the worst scandals in its history.
The US-based firm has worked closely with the Securities and Exchange Board of India in its investigation “and can confirm we had no knowledge of the unauthorized use of our order information,” a spokesperson for the asset manager, which oversees more than $2.7 trillion, said by email in response to a query by Bloomberg.
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SEBI last week prohibited Parekh and others from buying and selling securities, as well as associating with any entity registered with the regulator, after its investigation showed that Parekh allegedly obtained non-public information of a major US fund's trades and then passed on the information to his associates to front-run them.
The regulator investigated trades undertaken by individuals and brokers associated with Parekh over a two-year period ending June 2023.
Parekh was earlier banned by the market regulator 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.
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