Axis Securities Settles Front-Running Case With SEBI For Rs. 14.62 Lakh
SEBI's investigation revealed that Axis Securities failed to enforce compliance policies, allowing a dealer to exploit non-public information in trades involving SVI Consolidated Pvt Ltd.
Axis Securities Ltd is slated to pay a settlement amount of Rs. 14.62 lakh to the market regulator, the Securities and Exchange Board of India (SEBI), in settling a case concerning front-running activities.
SEBI's investigation revealed that a dealer at Axis Securities, Vikrant Bhimrao Kadam, colluded with his childhood friend, Mandar Ulhas Bhatkar, to front-run trades of a major client, SVI Consolidated Pvt Ltd.
The case, which involved trades in both equity and derivatives segments on the National Stock Exchange, was found to be a violation of the SEBI (Stock Brokers) Regulations, 1992. SEBI alleged that Kadam and Bhatkar profited by executing trades ahead of SVI Consolidated’s orders, taking advantage of non-public information.
As per the investigation findings, it was also alleged that Axis Securities failed to enforce its Dealer and Branch Manager Compliance Policy effectively, allowing Kadam and Bhatkar to carry out their front-running activities. This lack of due diligence was quoted as a breach of the regulations.
In response to the findings, Axis Securities applied for a settlement under SEBI’s Settlement Regulations, agreeing to pay Rs. 14.62 lakh without admitting to or denying the allegations. The settlement was reviewed and approved by SEBI's High Powered Advisory Committee and finalised by the Panel of Whole Time Members on Nov. 12, 2024.
The payment was confirmed on Nov. 28, 2024.
As per the settlement terms, SEBI has agreed not to initiate further enforcement action against Axis Securities unless the company breaches any conditions or if the representations made during the settlement are found to be false. The order came into effect immediately upon its issuance on Dec. 4, 2024.
