SEBI v. Ketan Bhupendra Parekh and another (front running a portfolio manager, Quest Investment Advisors, 2023)

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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In February 2023 a SEBI whole-time member found that the dealer of a portfolio manager, Quest Investment Advisors, had his father's brokerage account trade ahead of Quest's bulk orders. The order directs disgorgement of about Rs 22.9 lakh with 12 per cent interest, market restraints of two years and three months, and penalties of Rs 15 lakh in total.

The record

What was ordered

Civil penalty

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Disgorgement

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Prejudgment interest

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Total relief

—

Alleged gain

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Penalty as published

1.5m 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

Quest Investment Advisors Private Limited is a SEBI-registered portfolio manager. Ketan Bhupendra Parekh was one of its dealers, with authority to place orders and so advance knowledge of what Quest would trade. The second noticee, Bhupendra Jasvantrai Parekh, is his father and held a trading account with a sub-broker of Magnum Equity. SEBI's alert system flagged the account, and the investigation covered March 2019 to July 2020.

The show cause notice of November 2021 alleged that the son passed information about forthcoming Quest orders to the sub-broker's husband, who then placed trades in the father's account. It said that on 81 occasions buy trades went in just before a bulk Quest buy and on 94 occasions sell trades went in before a bulk Quest sell, each time squared off the same day in a buy-buy-sell or sell-sell-buy pattern. The notice put the resulting gain at Rs 22,88,126 and charged breaches of section 12A and the fraud-on-the-market regulations.

The whole-time member held that the noticees had violated section 12A(b) of the SEBI Act and the main fraud provisions of the 2003 regulations, and that the son placed every front running order in his father's account with the father's authority. He found the unlawful gain or avoided loss to be Rs 22,88,126 and noted that the notice alleged no specific investor loss.

The final order directs both noticees to disgorge Rs 22,88,126 jointly and severally with interest at 12 per cent a year from 31 July 2020, payable to the Investor Protection and Education Fund within 45 days. The son is restrained from the securities market for two years and the father for three months. Under section 15HA the son was penalised Rs 10 lakh and the father Rs 5 lakh, Rs 15 lakh in total.

The record does not show appeals, payment, or any action against the sub-broker or others who relayed the orders. 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. 2023-02-10 SEBI final 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.