SEBI bans LIC dealer for front running

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A Life Insurance Corporation (LIC) trader in India has been arrested by SEBI for running deals in the stock market of the insurance giant. In the order issued Thursday, SEBI prohibited LIC trader Yogesh Garg from buying, selling or dealing in securities until further orders. SEBI also banned four of his relatives.

SEBI notes in its ranking that organizations such as the LIC are critical to the stock market and the economy in general. “They are expected to have adequate processes in place to prevent, detect and address any fraudulent, manipulative or unfair business practices by their employees. The employees of these organizations have a significant responsibility to uphold the highest standards of regulatory compliance. i.e. At first glance The SEBI said a violation of the regulations, particularly by an employee of such an organization, needs to be dealt with strictly.

According to the regulator, Garg At first glance He appears to have knowledge of confidential information regarding the size and timing of the insurance giant’s impending buy/sell orders, which could affect the underlying share price.

The application stated that Garg had been working with LIC since November 2011 and during the examination period, he was working in LIC’s investment department through which trades were placed on behalf of LIC. I notice that the trading pattern of the alleged runners during the examination period shows that the orders of the first part of their daily trades were placed and executed prior to the impending LIC order(s) and squared order(s). of their trades – second stage buy/sell order(s) placed at set price less/more than LIC’s buy/sell limit price, ensuring matching of this buy/sell order(s) with own buy/sell order(s) with LIC.

It was also noted that the aforementioned trades were executed in a Buy-Buy-Sell (“BBS”) and/or Sell-Sell-Buy (“SSB”) pattern, through which the accounts of the so-called contestants were able to create a large profit. By adopting the above mechanism, the notifications At first glance Engaged in a scheme of LIC forward orders, violating provisions of the SEBI Act and PFUTP regulations.