SEBI Raids Traders Suspected Of Profiting From Non-Public Regulatory Information: Report

The Securities and Exchange Board of India (SEBI) has carried out search and seizure operations on traders suspected of profiting from non-public information on regulatory actions.

What Happened: The market watchdog initiated these searches on options traders who appeared to have benefited from early information on regulatory actions against specific banks and non-banking financial companies (NBFCs), Moneycontrol said. 

The operations were conducted at the residences of nearly 10 traders who were seen shorting stocks through options just before the regulatory actions were announced. In one case, a trader’s office was the subject of the operation.

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The probe started in June, with SEBI examining trades executed around the time the central bank took action against the entities. The regulator noticed that a group of traders were shorting stocks of banking and NBFC entities before the information about the regulatory actions was made public.

These traders had reportedly carried out close to 10 such trades, with the maximum profit in each case being around ₹1 crore. The SEBI investigation is primarily focused on determining whether these traders had access to price-sensitive information beforehand.

Earlier this month, SEBI reportedly conducted surprise inspections on key mutual fund executive and scrutinized their digital devices. Over the past year, five prominent mutual funds have undergone these inspections, during which the market regulator accessed the mobile phones of certain top executives, the report said. 

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