LIC employees involved in fraudulent trading: Sebi

SEBI has formally acknowledged the involvement of Life Insurance Corporation of India (LIC) employees in the front-running of trades executed by a significant client, as confirmed on March 19.

In its official statement, SEBI stated, "The Interim Order, issued earlier, was based on initial conclusions aimed at preventing further fraudulent trading activities and safeguarding against the misappropriation of gains amounting to INR 244.09 lakh. Despite submissions from the accused parties, deemed insufficient to refute the initial conclusions, a comprehensive investigation remains underway. Given the ongoing investigation and lack of substantial grounds to dispute the initial findings, SEBI has upheld the prima facie determination that the accused parties engaged in front-running trades, thereby violating relevant sections of the SEBI Act and PFUTP Regulations."

The interim order, served on April 27, 2023, involved the impounding of illegal gains exceeding Rs 2.44 crore and restrained the accused from participating in the securities market until further directives.

SEBI's inquiry commenced following surveillance alerts indicating potential front-running activities by the accused parties spanning from January 2022 to March 2022. Trades executed between January 1, 2020, and March 15, 2022, were scrutinized during the investigation process.