SEBI v. Kushal Rajesh Sheth and others (front running of Marcellus group trades, settlement, 2025)

Settled

✓ 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 October 2025 SEBI settled, on a neither-admit-nor-deny basis, a case against fourteen members and associates of a family accused of trading ahead of the orders of the Marcellus group of funds, after a dealer for the group allegedly passed on order information. The applicants agreed to monetary payments, disgorgement and a six-month voluntary market ban.

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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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.

What is alleged to have happened

Two Whole Time Members of the Securities and Exchange Board of India signed this settlement order on 3 October 2025. The fourteen applicants are Kushal Rajesh Sheth, a dealer employed by Marcellus Investment Managers (a registered portfolio manager), his uncle Ashwin Somchand Sheth, other relatives and their Hindu undivided family accounts, a few connected individuals, and the firm BW Traders. The order names the first twelve listed here in the record; two further applicants, Nikunj Balchand Shah HUF and Chirag Balchand Shah HUF, are also covered.

SEBI alleged that the applicants repeatedly traded ahead of orders from the Marcellus group, which included a portfolio manager, a category 3 alternative fund and two foreign portfolio investors. According to the order, the dealer knew of large pending orders, the uncle placed or directed trades in relatives' accounts using that knowledge, and the information also reached a further trader who used his wife's account. The alleged channels were calls, messages, images and in-person meetings. The alleged breaches were of section 12A of the SEBI Act and the fraud provisions of the PFUTP Regulations.

The applicants asked to settle under the 2018 settlement regulations without admitting or denying the findings. After internal committee meetings in May 2025, they proposed terms; an advisory committee recommended them on 5 June 2025, the panel of Whole Time Members approved them on 8 August 2025, and demands were issued on 22 August 2025. SEBI confirmed receipt of payment, reported by the applicants on 21 September 2025.

The settlement terms list an indicative monetary amount for each applicant, a separate disgorgement figure with interest at 12 percent for most of them, and a six-month voluntary debarment from the securities market. The indicative amounts range from about Rs 44 lakh for most applicants to Rs 76.14 lakh for BW Traders, with Rs 57 lakh proposed for the dealer and about Rs 71.6 lakh for his uncle. One further disgorgement of Rs 15,55,108 for the trades in the wife's account was to be paid in full by the uncle, jointly and severally with others. Because the order labels the first column indicative rather than totalling it, this record does not state one settlement figure.

Under the order SEBI will not start enforcement action for the settled violations, subject to the right to act if representations prove untrue or terms are breached. The record does not show any parallel criminal case, any appeal, or the total loss to the funds, and the order makes no finding on the facts.

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. 2025-10-03 SEBI settlement 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.