Ketan Parekh, a former stockbroker from Mumbai previously banned for market manipulation by SEBI in 2003 for 14 years on allegations of insider trading, price rigging and illegal diversion of bank funds into the stock market.
During this period, Parekh artificially rigged prices of certain chosen securities, informally referred to as K-10 stocks, using large sums of money borrowed from banks, including the Madhavpura Mercantile Co-operative Bank, where he was a director. His activities led to a major crash in the stock market, wiping out billions of rupees in market capitalization.
Ketan Parikh has been implicated in a new front-running scheme within the Indian stock market, utilizing insider information from a significant foreign institutional investor.
His Re-enter market but unfortunately landed in the SEBI’s net. The Securities and Exchange Board of India (SEBI) has nailed Ketan Parikh and issued an interim order prohibiting Parekh and two associates from engaging in securities transactions.
SEBI has uncovered a front-running scheme that involved Parekh using non-public information (NPI) to orchestrate illegal stock market trades. Sebi’s investigation revealed that Parekh, along with his associate Rohit Salgaocar, a Singapore-based trader used a network of mobile phones to profit from insider information, ultimately generating unlawful gains of Rs 65.77 crore.
SEBI has uncovered how Tiger Global was supporting Ketan Parekh to orchestrate illegal stock market trades
Parekh kept changing his numbers to evade regulator but SEBI upped the game. SEBI’s investigation began with a mobile number registered to Mamta Parekh, linked to her Aadhar. The number was part of a network of at least 10 connections tied to Ketan Parekh, all traced to Parekh’s Mumbai residence and movements, providing critical evidence to uncover the scheme.
Parekh and Salgaocar used mobile numbers to coordinate with front runners who executed trades based on insider tips. Parekh received these tips from Salgaocar, a Singapore-based trader with access to confidential trade data from a major US-based fund, dubbed the "Big Client is likely Tiger Global. While Tiger Global itself is not accused of any misconduct, the association with Parekh's illicit activities could potentially tarnish its reputation in India.
SEBI's investigation further revealed that a major US-based asset manager, with multiple funds registered as foreign portfolio investors, sought advice from Salgaocar before executing trades in India. Additionally, Salgaocar maintained referral arrangements with Motilal Oswal and Nuvama, facilitating FPI trades in exchange for a commission.
Moving ahead, all involved entities have 21 days to respond to SEBI's investigators.
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