SEBI v. MBM Financial Services, Chetan Mehta and Mehernosh D. Bhagat (front running of Alpna Enterprises 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 a broker's dealer passed advance details of a large client's orders to a proprietary trading partnership, which traded ahead of them in 17 instances for about Rs 48.1 lakh. The order directed disgorgement with interest, market bans of one to two years, and penalties of Rs 48 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

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Alleged gain

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Penalty as published

4.8m 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

On 30 May 2025 a SEBI quasi-judicial authority issued an order against the partnership MBM Financial Services, its partner Chetan Mehta, and Mehernosh D. Bhagat, a dealer at the broker Antique Stock Broking. SEBI had examined trading between 1 December 2021 and 30 June 2022 in connection with orders of a high-volume client, Alpna Enterprises.

SEBI alleged that Mr Bhagat, who executed Alpna's large orders, shared their details with Mr Mehta, and that MBM Financial traded in the same derivative contracts moments before Alpna in 17 instances, then closed its positions after the large orders moved the market. It said the firm earned about Rs 48.11 lakh this way, around two-thirds of its profits in the period, and that in 13 of the 17 instances the match with Alpna's orders was between 90 and 100 per cent. Call records showed frequent and long calls between the two men around the relevant times. The notice invoked section 12A of the SEBI Act and Regulations 3 and 4, including Regulation 4(2)(q), of the PFUTP Regulations.

The authority found the allegations established, treated the firm's partners as jointly and severally liable for the firm's acts, and found unlawful gain of Rs 48,11,373.

The order directed MBM Financial and Mr Mehta to disgorge Rs 48,11,373 with 12 per cent annual interest from 30 June 2022 to the date of payment, into the Investor Protection and Education Fund. It restrained the firm and Mr Mehta from the securities market for two years and Mr Bhagat for one year. Under section 15HA, penalties were Rs 25 lakh on the firm, Rs 15 lakh on Mr Mehta and Rs 8 lakh on Mr Bhagat, Rs 48 lakh in total.

The record does not show whether any noticee appealed, whether the sums were paid, or the other partner's position. The order is a regulatory sanction, not a criminal conviction. A separate settlement order against the broker Antique over its dealing-room controls in this matter is not part of this record.

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. 2025-05-30 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.