A matrimonial website helped crack a share market scam in India

A matrimonial website helped crack a share market scam in India
New Delhi, Dec 8 () To catch manipulators, markets regulator Sebi has started looking at matrimonial profiles of suspected persons to establish link with family members in front running cases. The markets watchdog has been scanning Facebook accounts of suspected persons in cases related to insider trading cases.

In the case of front running of several funds of Fidelity Group entities, Sebi has checked the profile of a trader Vaibhav Dhadda (who was using the alias Avi) at the matrimonial website www.jainshubhbandhan.com in order to establish his link with family members.

The matrimonial website has mentioned Vaibhav as the son of Alka Dhadda, Sebi said in an interim order dated December 5.

In addition, his passport details also showed Alka Dhadda as his mother.

After gathering evidence, and also through scanning profiles at matrimonial website, about violation, Sebi has barred Vaibhav as well as his mother Alka and sister Arushi from the capital markets after its prima facie probe found that they were responsible for pocketing gains through front running activities.


Also, the regulator has directed the family members to jointly open an escrow account with a nationalised bank and deposit alleged unlawful gains of Rs 1.86 crore made by them within 15 days.

It has also frozen the bank accounts of the these persons to prevent them from diverting the wrongful gains made by them from the front-running trades.

Front-running, in market parlance, means buying or selling securities ahead of a large order so as to benefit from the subsequent price move.

The Sebi probe found that Vaibhav, being the trader on behalf of the Fidelity Group, was in possession of non-public information of the impending trades of Fidelity Group entities.

The trading pattern of Alka and Arushi suggests that they took advantage of the impending trading activity of Fidelity Group entities by front-running and thereby generated profits for themselves by the price movement of scrips on account of large buy or sell orders of Fidelity Group entities, said Sebi.

Dhaddas' modus operandi was to purchase a stock just ahead of a buy placed by a Fidelity Group entity on the same stock. Similarly, they would offload a particular scrip just ahead of a sell order placed by the Fidelity firm on the same stock.

It further said that Vaibhav was operating from Hong Kong and had access the trading accounts of his two family members.

The conducts of Avi, Alka and Arushi have prima facie defrauded the market as general investors have suffered due to their front-runing activity, it said.

Front-running activities of these persons resulted in benefit of over Rs 1.85 crore in the trading account of Alka and Rs 28,500 in the trading account of Arushi, the regulator said.

By indulging in front running trades, these persons violated PFTUP (Prohibition of Fraudulent and Unfair Trade Practices) norms.

Earlier in the insider trading case of Deep Industries, Sebi had scanned Facebook accounts of suspected persons in order to ascertain whether they were connected entities.

The regulator had found that the persons involved in insider trading were friends on the social networking site and liked each others photos posted on the platform.

In addition, the markets watchdog goes through Facebook accounts of suspected persons, with 'friends' and 'likes' posts being scanned in insider trading cases.