The Securities and Exchange Board of India (SEBI) has barred Madhav Stock Vision Pvt Ltd (MSVPL) from using its proprietary trading account following its alleged involvement in front-running—a prohibited practice in securities trading. The market regulator has also imposed trading bans on five associated individuals and directed the disgorgement of illegal profits totaling ₹2.73 crore earned during the manipulation.
Investigation Uncovers Use of Multiple Brokers to Mask Front-Running
According to SEBI’s interim order issued on April 23, 2025, the investigation found that MSVPL front-ran trades placed by a “Big Client,” a major institutional investor, by exploiting advance information and executing trades before the client’s large-volume orders. These illicit activities were routed through four different stock brokers, all registered with both the National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE), in an attempt to evade detection.
The period under scrutiny spans from April 1, 2020, to December 1, 2023. During this time, MSVPL and its associates allegedly timed their trades to benefit from price movements caused by large orders placed by the Big Client, thereby earning unfair gains in violation of securities law.
Illegal Gains of ₹2.73 Crore to Be Returned by Six Accused Entities
SEBI has issued directions for the six entities involved—including MSVPL and five individuals—to refund the illegal profits of ₹2.73 crore. The order includes a complete restriction on trading in securities for these entities until further notice. SEBI emphasized that the interim measures are aimed at safeguarding market integrity and ensuring investor confidence.
The individuals named in the order have been accused of either executing the trades or facilitating the front-running scheme. Their activities, as documented by SEBI, indicate a coordinated attempt to front-run trades of a high-value client and leverage price movements to their advantage.
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Understanding Front-Running and Its Market Impact
Front-running is an unethical and illegal market practice where a trader takes advantage of confidential information—typically received through brokers or analysts—by executing trades ahead of large, market-moving client orders. Such practices distort market fairness, create an uneven playing field for retail and institutional investors, and erode trust in financial markets.
SEBI’s prompt action in this case highlights its increased vigilance and commitment to curbing market manipulation. The regulator is also expected to pursue further proceedings based on the findings of this interim order, which may result in permanent penalties or additional monetary fines.
SEBI’s clampdown on Madhav Stock Vision and its associates for front-running underscores the regulator’s proactive approach in cracking down on market misconduct. By ordering the return of illicit gains and suspending trading privileges, SEBI aims to reinforce transparency and deter future violations in the securities market.