SEBI Pulls Up Sheth Family, BW Traders in Front-running Probe; Settlement at Rs6.88 Crore with Six-month Ban
Moneylife Digital Team 06 October 2025
Market regulator Securities and Exchange Board of India (SEBI) has settled the high-profile front-running case involving trades of the Marcellus group, with 14 individuals and entities agreeing to pay a combined settlement amount of Rs6.88 crore along with disgorgement of Rs3.88 crore, while also imposing a voluntary six-month debarment from the securities market on themselves. The settlement order issued last week brings closure to one of the most closely watched enforcement actions in recent years.
 
The case centred on allegations that Kushal Rajesh Sheth, a dealer at Marcellus Investment Managers, passed confidential, non-public information about impending trades of Marcellus clients to his uncle, Ashwin Somchand Sheth, who along with family members, Hindu undivided families (HUFs) and associates executed front-running trades. SEBI’s probe established that the information was also shared with Amit Mahida, who traded through his wife Krishna Mahida’s account.
 
According to SEBI, communication channels included phone calls, WhatsApp messages, images, and physical meetings. The regulator held that these actions violated provisions of the SEBI Act, 1992, and the Prohibition of Fraudulent and Unfair Trade Practices (PFUTP) Regulations, 2003.
 
Settlement terms and penalties
The settlement amounts agreed to by the applicants include:
 
1. Kushal Rajesh Sheth – Rs57 lakh; voluntary debarment for six months.
 
2. Ashwin Somchand Sheth – Rs71.6 lakh, plus disgorgement of Rs75.92 lakh; six-month debarment.
 
3. Ashwin Somchand Sheth HUF – Rs44 lakh, disgorgement of Rs32.94 lakh; six-month debarment.
 
4. Kalpana Ashwin Sheth – Rs44 lakh, disgorgement of Rs16.68 lakh; six-month debarment.
 
5. Somchand P Sheth – Rs44 lakh, disgorgement of Rs23.21 lakh; six-month debarment.
 
6. Somchand P Sheth HUF – Rs44 lakh, disgorgement of Rs23.41 lakh; six-month debarment.
 
7. Rajesh Somchand Sheth – Rs44 lakh, disgorgement of Rs9.69 lakh; six-month debarment.
 
8. Rajesh Somchand Sheth HUF – Rs44 lakh, disgorgement of Rs11.74 lakh; six-month debarment.
 
9. Dharmishtha Rajesh Sheth – Rs44 lakh, disgorgement of Rs8.86 lakh; six-month debarment.
 
10. Aarti Rishi Shah – Rs44 lakh, disgorgement of Rs7.36 lakh; six-month debarment.
 
11. Pradeep Kantilal Shah – Rs44 lakh, disgorgement of Rs46.99 lakh; six-month debarment.
 
12. Nikunj Balchand Shah HUF – Rs44 lakh, disgorgement of Rs24.19 lakh; six-month debarment.
 
13. Chirag Balchand Shah HUF – Rs44 lakh, disgorgement of Rs11.18 lakh; six-month debarment.
 
14. BW Traders – Rs76.14 lakh, disgorgement of Rs90.52 lakh; six-month debarment.
 
Additionally, SEBI held Kushal Rajesh Sheth, Ashwin Somchand Sheth, Amit Mahida and Krishna Amit Mahida jointly and severally liable for illegal gains of Rs15.55 lakh made through Krishna Mahida’s account. Ashwin Somchand Sheth undertook to pay this amount in full.
 
SEBI's high-powered advisory committee (HPAC) reviewed the case in June 2025 and recommended settlement. SEBI’s whole-time members (WTM) approved the proposal in August 2025, and the applicants remitted the settlement amounts on 21 September 2025.
 
SEBI clarified that the order settles the enforcement proceedings but it retains the right to reopen action if misrepresentation or breach of settlement terms is discovered.
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