**Motilal Oswal Financial Services Settles Proceedings with SEBI Over Alleged Front-Running Lapses**

*New Delhi:* Motilal Oswal Financial Services Ltd (MOFSL) on Thursday settled proceedings initiated against it in connection with alleged lapses related to suspected front-running of trades for a large client. The company paid Rs 34.85 lakh as settlement charges to resolve the matter.

Front-running is an illegal practice in the stock market where an entity trades based on advance information from a broker or analyst before such information is made available to clients.

The settlement order followed MOFSL’s proposal to resolve the proceedings “without admitting or denying the findings of facts and conclusions of law.” In the official order, SEBI’s Quasi Judicial Authority, Santosh Shukla, stated, “…it is hereby ordered that the proceedings initiated against the applicant (MOFSL) vide SCN (Show Cause Notice) dated February 20, 2025, is disposed of in terms of settlement terms.”

A spokesperson for Motilal Oswal Financial Services reacted to the order, stating, “The SEBI settlement order announced today (Thursday) relates to involvement and non-maintenance of records by one of our authorised partners (AP) – Om Securities. We had to opt for the settlement route and the matter now stands resolved.”

The issue originated from an investigation conducted by the Securities and Exchange Board of India (SEBI) to determine whether the trades of a major client were front-run by certain entities, including the Chaturvedi Group, during the period from January 1, 2022, to December 8, 2023.

Following the probe, SEBI issued a show cause notice to MOFSL on February 20, 2025, alleging that the brokerage failed to exercise the due skill and care expected of a registered stock broker by not maintaining proper records of client order instructions.

The regulator also charged MOFSL with attempting to create supporting documents after the execution of trades, which raised concerns about compliance standards and constituted a violation of SEBI’s Stock Brokers regulations.

After filing a settlement application in March this year, MOFSL submitted revised settlement terms, which were approved by the markets watchdog. Under these terms, MOFSL paid Rs 34.85 lakh to SEBI, with confirmation received on September 17.

SEBI stated that the proceedings initiated through the show cause notice stand disposed of in accordance with the settlement. However, the regulator clarified that it reserves the right to take action if representations made by the company are later found to be untrue or if there is any breach of the settlement terms.

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https://www.freepressjournal.in/business/motilal-oswal-settles-front-running-allegations-by-sebi-with-3485-lakh-payment