https://www.taxtmi.com/caselaws?id=348512 The SC held that non-intermediary front running constitutes fraud and unfair trade practice under FUTP 2003 regulations 3 and 4(1) when specific elements are established. The court ruled that SEBI must prove the tipster had a duty to maintain confidentiality of non-public information, the tippee knew of this breach, and trading occurred causing inducement and inequitable results. The judgment emphasized that confidential corporate information is protected property, and breaching such duty while trading constitutes fraud. The court applied preponderance of probabilities standard rather than proof beyond reasonable doubt, finding mens rea unnecessary for regulations 3 and 4. Based on transaction volume, timing proximity, and repeated nature of trades, the court concluded the parties violated market integrity through joint liability. Appeals were allowed/dismissed accordingly, restoring penalties imposed by the Adjudicating Officer. en-us Wed, 20 Sep 2017 00:00:00 +0530 Thu, 17 Jul 2025 11:37:00 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=348512 The SC held that non-intermediary front running constitutes fraud and unfair trade practice under FUTP 2003 regulations 3 and 4(1) when specific elements are established. The court ruled that SEBI must prove the tipster had a duty to maintain confidentiality of non-public information, the tippee knew of this breach, and trading occurred causing inducement and inequitable results. The judgment emphasized that confidential corporate information is protected property, and breaching such duty while trading constitutes fraud. The court applied preponderance of probabilities standard rather than proof beyond reasonable doubt, finding mens rea unnecessary for regulations 3 and 4. Based on transaction volume, timing proximity, and repeated nature of trades, the court concluded the parties violated market integrity through joint liability. Appeals were allowed/dismissed accordingly, restoring penalties imposed by the Adjudicating Officer. Case-Laws SEBI Wed, 20 Sep 2017 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=348512