SEBI v. Anita Shyam Mhatre and others (front running of Reliance Capital Mutual Fund, 2022)

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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A SEBI adjudicating officer fined a client, her dealer, a Reliance Capital Mutual Fund employee and their broker Rs 10 lakh in total for front running the fund's orders in late 2008. A separate whole-time member order had already barred the first three for six months and ordered disgorgement.

The record

What was ordered

Civil penalty

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Disgorgement

—

Prejudgment interest

—

Total relief

—

Alleged gain

—

Penalty as published

1m 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 adjudicating officer of the Securities and Exchange Board of India decided the matter on 29 July 2022. The noticees were Anita Shyam Mhatre, a client of the broker Anugrah Stock & Broking Pvt Ltd; Sanjay Parekh, a dealer who traded her account; Rakesh Shah, an employee of Reliance Capital Mutual Fund; and the broker itself. SEBI's investigation covered 1 October to 30 November 2008.

SEBI alleged that Mr Shah passed information about the fund's pending trades to Mr Parekh, who traded ahead of the fund in Ms Mhatre's account. From NSE order logs it found 64 scrip days on which the account and the fund both traded, and 26 of them showed the account buying or selling just ahead of the fund in the same direction.

The order finds that the three individuals breached section 12A of the SEBI Act and Regulations 3 and 4(1) of the PFUTP Regulations. It finds the broker breached the code of conduct by lacking adequate controls over its dealers and failing to show due skill and care.

The penalties are Rs 3 lakh each on the three individuals under section 15HA and Rs 1 lakh on the broker under section 15HB, Rs 10 lakh in total. The order notes that a whole-time member had in May 2021 barred the three individuals for six months and directed Ms Mhatre to disgorge Rs 8,86,949.45 with 4 percent simple interest, and it took that into account in setting the amounts.

The record does not show whether anyone appealed or whether payments were made. It describes no criminal case.

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. 2022-07-29 SEBI order

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.