TaxTMI 
TaxTMI 
2025 (6) TMI 1895
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.... Associates ORDER: Per: Justice P.S. Dinesh Kumar, Presiding Officer We have heard Shri Pesi Modi, learned Senior Advocate for the appellant and Shri Gaurav Joshi, learned Senior Advocate for the respondent- SEBI. 2. This appeal is directed against the ex-parte interim order- cum-show cause notice dated January 02, 2025 passed by the WTM (Whole Time member), SEBI (Securities and Exchange Board of India) in the matter of Rohit Salgaocar and 21 others. Appellants are noticees Nos. 4, 11, 16, 17 and 18. 3. Brief facts of the case are, SEBI conducted an investigation for the period January 1, 2021 and June 20, 2023 with regard to pattern of trades in common scrips of various funds of an overseas entity engaged in the business of ....
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....23 therefore, it is unjust and unfair to freeze appellant's bank accounts and demat accounts; that the SEBI has arrived at an incorrect conclusion that appellant no. 1 has made an illegal gain of Rs. 12,45,20,605/-; that appellants have a good case on merits and the balance of convenience is in favour of the appellant. 7. He further submitted that the major finding in the impugned order is that appellant's proprietary trading account (Salasar Stock Broking Ltd.) was used to execute trades based on non-public information received from noticee No. 2, Ketan Parekh. Appellants deny indulgence in any front-running of any trade of third party. Appellants were not aware that the information received by them was a non-public information or relat....
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....positions in the same scrips ahead of the impending order of the big client based on the trading instructions received from Ketan Parakh. As and when the substantial impending order of the big client were placed in the market, the Front-runners took counter-positions upon instructions from Ketan Parakh to match with the position of the big client. This would lead to squaring off their initial positions taken in the scrip or creating excess long or short position in the scrip, which they would eventually square off during the day and thus generated huge illegal gains in a short span of time. 11. Shri Joshi further submitted that investigation has revealed that "Big Client‟ used to place orders containing the scrip name, buy/sell qua....
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....livered by cash. He took us through other WhatsApp screenshots and submitted that the appellant No. 1 being stock broker has used his proprietary account for front- running the trades. He prayed that in view of admitted facts, appellant's prayer for grant of interim relief subject to deposit of 50% of the estimated profit may be rejected. 15. We have carefully considered rival contentions and perused the records. 16. As noted hereinabove, it is not denied that the Whats Appmessage extracts are taken from the device belonging to Sumit Sonthalia (notice No. 11). The screenshots in Table No. 55 and Table No. 56 clearly show cash transfer of Rs. 25 Lakhs to Sumit Sonthalia and Rs. 50 Lakhs from Sumit Sonthalia to Ketan Parekh. 17. T....
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....dertaken by the FR2 and Big Client during aforesaid time period Particulars Buy / Sell Count Of Orders Order Start Time Order End Time Trade Start Time Trade End Time Sum of Trade Qty Average Trade Price Range (in INR) Match Vol. FR2 Buy 13 10:03:42 10:32:32 10:03:42 10:32:34 1,00,000 2428.80 - 2439.00 (2433.32) - Big Client Buy 7 11:11:02 11:11:17 11:11:02 11:11:26 2,50,000 2446 - FR2 Sell 4 11:11:08 11:11:08 11:11:08 11:11:08 1,00,000 2446 99,173 18. The screenshot extracts containing the trading instructions given by Ketan Parekh are extracted in Table No. 36. Table No. 35 Shows that instruction was given to buy HDFC....