Big Scam Exposed: The Securities and Exchange Board of India (SEBI) has exposed a front-running scheme run in connivance with PNB MetLife India Insurance Company's equity dealer Sachin Bakul Dagli and eight other entities. Under this scheme, these entities illegally earned a profit of Rs 21.16 crore. SEBI says that this whole game was going on for more than three years. SEBI issued an interim order on Friday banning Sachin Bakul Dagli and eight other entities from the securities market and confiscated the illegal profits earned by them.

What came out in SEBI's investigation

SEBI found in its investigation that some entities had planned the suspicious front-running of trades made by PNB MetLife India Insurance Company Limited (Big Client). The objective was to understand whether these entities took advantage of the trades of Big Client in connivance with other dealers and fund managers and violated the SEBI Act and PFUTP (Prohibited Fraudulent and Unfair Trade Practices) Regulations. The investigation was scheduled from January 1, 2021 to July 19, 2024. During this time it was revealed that most of the trading decisions of PNB MetLife were in the hands of Sachin Dagli.

Misuse of confidential information

SEBI revealed that Sachin Bakul Dagli (Equity Dealer, PNB MetLife) and his brother Tejas Dagli (Equity Sales Trader, Investec) obtained confidential information related to trade orders of institutional clients of PNB MetLife and Investec. Using this information, they shared this information with Sandeep Shambharkar, who used it in front-running trades through the accounts of Dhanmata Realty Pvt. Ltd. (DRPL), Worthy Distributors Pvt. Ltd. (WDPL) and Pragnesh Sanghvi.

The plan lasted for three years

SEBI noted that a total of 6,766 front-running trades were executed through the accounts of DRPL, WDPL and Pragnesh Sanghvi. Illegal profits of Rs 21,15,78,005 were earned in the process. This activity continued for more than three years.

Ban and money confiscated

SEBI has prohibited these nine entities from "purchasing, selling or dealing in securities directly or indirectly in any manner." In addition, "an amount of Rs 21,15,78,005, which is illegal profits earned from these front-running activities, has been seized jointly and individually." This case reflects SEBI's efforts to protect investors and ensure market transparency. This action will serve as a warning to other participants and discourage illegal trading practices.

What did PNB MetLife say

A statement issued by PNB MetLife said that PNB MetLife has fully cooperated with the authorities in this matter and thanks SEBI for reaching a conclusion of this fraud, which was committed by the nominee against PNB MetLife. We have taken disciplinary action under our internal procedures. PNB MetLife is committed to maintaining the highest standards of corporate governance, transparency and integrity.