SEBI v. Nikhil Khaitan and others (family front running of big-client 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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A SEBI officer found that a broker's dealer used his relatives' accounts to trade just ahead of large client orders he was handling, earning about Rs 1.53 crore over six years. The order directed disgorgement of that sum, one-year market bans for all five noticees, and penalties of Rs 30 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

3m 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

On 28 March 2025 a SEBI quasi-judicial authority issued a final order against Nikhil Khaitan, a dealer at stock-broking firms, and four relatives: his parents Om Prakash Khaitan and Manju Khaitan, his wife Neha Khaitan and his sister Nidhi Tibrewal. SEBI had examined trading from 1 September 2016 to 2 August 2022 after an alert from its surveillance system.

SEBI alleged that Mr Khaitan, who placed orders for large clients at trading members Sumedha Fiscal Services and later Eureka Stock and Share Broking Services, also controlled the four relatives' accounts. Those accounts were linked by shared addresses, phone numbers and emails. The relatives' intraday trades were said to open just before an impending big-client order and to close by selling or buying at limits set so that they would match the client's order. The accounts traded through two other brokers, and the order-placing IP address was said to match Mr Khaitan's workplace location.

The show cause notice of 25 June 2024 alleged participation in a scheme to front run, in breach of section 12A(a), (b) and (c) of the SEBI Act and the PFUTP Regulations. The officer held all five liable and found total profit of Rs 1,52,90,938.74.

The order directed the five to disgorge that sum jointly and severally within 45 days, to the Investor Protection and Education Fund. All five were restrained from the securities market for one year. Under section 15HA the order imposed a penalty of Rs 10 lakh on Nikhil Khaitan and Rs 5 lakh on each of the other four, Rs 30 lakh in total. It also froze their assets except to pay these sums.

The record does not show who the big clients were, the harm to them, any appeal, or any action against the broking firms or a criminal case. The order is a regulatory sanction, not a conviction.

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. 2025-03-28 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
• Order (PDF)

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.