The Securities and Exchange Board of India (SEBI) has stopped former stock broker Ketan Parekh from buying or selling stocks again. This is because he is accused of using secret information to make trades for a US-based fund, as reported by Bloomberg.
In the early 2000s, Parekh was involved in one of India’s biggest financial scandals. SEBI looked into his trades and the trades of those connected to him for two years, ending in June 2023. The investigation found that Parekh got confidential information about a big US fund’s trades from Rohit Salgaocar, who was based in Singapore. Salgaocar had an agreement to send trades of this fund to Motilal Oswal Financial Services Ltd. and NiftyStat.
After getting this information, Parekh shared it with his friends to make a profit before the actual trades happened. SEBI member Kamlesh Varshney explained this in the order released on January 2, 2025.
In 2003, SEBI had banned Parekh for 14 years because he was found guilty of insider trading, price manipulation, and unfairly using bank funds for stock trading. His actions caused a stock market crash in February and March 2001. SEBI has also ordered that about ₹65.80 crore in illegal profits made by those involved in this scam be returned.
Parekh and 21 others mentioned in the SEBI report have 21 days to respond to these allegations.
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