SEBI v. Shankar Tukaram Vadatkar and others (front running of family-trust orders, 2025)

Judgment entered

✓ Checked against the primary document on October 8, 2026. The library's summary, tags and figures for this record were compared with the regulator's own document by an AI model (Claude) following written instructions, in a single reading of the order; an independent second reading of 60 SEBI records agreed on every field for 56, the four misses being penalty amounts; a later sample of 50 of the SEBI records added on 9 October agreed on every field for 46. No lawyer has reviewed them. A checked record can still contain errors, and checked does not mean endorsed. See how we check records or report a correction.

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SEBI found that thirteen relatives and associates of a broker's dealer traded ahead of large equity orders placed for three family trusts at NSE and squared off for intraday profits. The October 2025 order restrained them for one to three years and imposed penalties totalling Rs 1.08 crore, after the main participants had settled in December 2024.

The record

What was ordered

Civil penalty

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Disgorgement

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Prejudgment interest

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Total relief

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Alleged gain

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Penalty as published

10.8m INR

A dash means the release did not state a figure we could extract, not that the figure is zero. Penalty and disgorgement are stored separately so aggregates across the library do not double-count the same dollars. This regulator states penalties in INR. The figure is recorded as published and is not converted, so it does not appear in the USD totals or medians used elsewhere on this site.

What is alleged to have happened

The order of 23 October 2025 was passed by a SEBI quasi-judicial authority under Sections 11, 11B and 15HA of the SEBI Act. A common show-cause notice of 24 January 2024 had named 30 noticees; six of them, including the alleged source of the information, the main front runner and an employee of his who allegedly carried the information, settled on 19 December 2024 without admitting or denying the allegations and paid the full alleged gain of Rs 2,06,25,679.95 with 12 percent interest. The order therefore deals with the remaining noticees, mostly individuals and Hindu undivided family accounts connected to the main front runner.

SEBI examined the period January 2021 to October 2022 and alleged that these accounts consistently placed orders on NSE's cash segment just ahead of the orders of three family trusts (the order's Big Client) and squared them off, using details of the impending orders that reached them from a dealer at the trusts' broker through an employee of the main front runner. Several accounts were opened close to the trading, were operated from a terminal allotted to the main front runner, or belonged to relatives, and the trading stopped on the date SEBI first queried the Big Client.

The noticees raised procedural objections, among them delay, the rules for show-cause notices, the effect of the earlier settlement and the lack of cross-examination, and these were rejected. On the merits the order finds, on a preponderance of probability, that 21 noticees either traded ahead of the Big Client's orders or lent their accounts to the main front runner, in breach of Section 12A of the SEBI Act and Regulations 3 and 4, including the deemed-fraud rule for front running. Eight noticees who were named only as the heads of the HUFs and did not themselves trade were not sanctioned.

Because the full alleged gain had been disgorged by the settling parties, the order declined to direct any further disgorgement. It restrained 13 noticees from the securities market for between one and three years (three years for Shankar Tukaram Vadatkar, two years for six others, one year for the rest), barred them from selling assets except to pay penalties, and imposed Section 15HA penalties of between Rs 5 lakh and Rs 15 lakh each, Rs 1.08 crore in total, payable within 45 days.

The record does not show whether any noticee appealed, what portion of the penalties has been paid, or the identity of the information source beyond the settled parties, who are not named in this order. It describes no criminal case. The Big Client is not alleged to have done anything wrong.

This library tags the matter as front running. The tagging is ours, not the regulator's.

For the regulator's own account of the facts, read the primary document linked above. This page deliberately summarises the structured record rather than reproducing the order.

What technique is this, and how does it work?

This action is tagged with one technique in our taxonomy. The tagging is ours: regulators charge statutory provisions, not technique names, so the mapping is an editorial judgement described in our editorial policy.

• Front running — see how it works, what statute it engages, and every other action tagged the same way.

Timeline

1. 2025-10-23 SEBI order imposing restraints and penalties

Primary documents

Everything on this page derives from the documents below. Where our summary and the primary document disagree, the primary document is right.

• SEBI order

The linked release is published by the issuing regulator under its own terms. Our summary and narrative above are our own writing.

Related actions

Other actions in the library sharing at least one technique tag with this one.

Record added October 8, 2026. submit a correction.