SEBI uncovers front-running scheme involving PNB MetLife equity dealer

PNB: Accordingly, Sebi has curbed these entities “from buying, selling or dealing in securities, either directly or indirectly, in any manner whatsoever until further orders.”

The Securities and Exchange Board of India (SEBI) has exposed a significant front-running operation involving Sachin Bakul Dagli, an equity dealer for PNB MetLife India Insurance Company, along with eight other entities.

These individuals collectively generated illegal profits amounting to ₹21.16 crore.

Key Highlights of the Case:

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1. Front-Running Scheme:
   • The scheme was active for over three years.
   • Front-running refers to unethical trading where individuals trade based on non-public information about large trades by institutional clients, impacting market prices to their advantage.
2. Action Taken by SEBI:
   • SEBI issued an interim order to prohibit Sachin Bakul Dagli and the eight other entities from participating in the securities market.
   • The illicit gains of ₹21.16 crore made by the accused were impounded.
3. PNB MetLife’s Response:
   • The company confirmed full cooperation with SEBI during the investigation.
   • Disciplinary action has been taken against the employee involved.
   • A statement emphasized PNB MetLife’s commitment to corporate governance, transparency, and integrity.
4. Investigation Details:
   • The period of SEBI’s investigation spanned from January 1, 2021, to July 19, 2024.
   • SEBI focused on determining whether Dagli and other entities colluded to execute trades based on insider knowledge, violating SEBI’s Prohibition of Fraudulent and Unfair Trade Practices (PFUTP) regulations.

Implications:

This case underscores the importance of strong internal compliance mechanisms within financial institutions to prevent misuse of sensitive information. It also reflects SEBI’s vigilance in protecting market integrity.

For additional details, refer to SEBI’s official updates or regulatory announcements.