Quant Mutual Fund faces Sebi probe in front-running case, issues clarification

Jun 24, 2024 

A search and seizure operation was conducted at locations in Mumbai and Hyderabad and Quant dealers and people connected with the case were questioned.

Quant Mutual Fund received inquiries from Securities and Exchange Board of India (Sebi) and is fully committed to complying with the review, the multi-asset manager said in a statement. The $11 billion manager said it will provide the stock market regulator with all necessary support including supplying data on a regular basis after it was reported that the fund’s Mumbai headquarters was searched by Sebi on suspected front-running.

Front-running is the trading of stocks by someone privy to information about a large impending transaction that will move prices. It is illegal in India. Moneycontrol reported that the search and seizure operation was conducted at locations in Mumbai and Hyderabad and Quant dealers and people connected with the case were questioned.

Quant Mutual Fund said in the statement, “We are dedicated to maintaining transparency and adherence to regulatory standards." Quant Mutual Fund is one of India’s largest asset managers and has been a key beneficiary of the surging inflows into stock market from local individual investors. A similar turn of events in 2022 at another mutual-fund business raised fears about increased regulatory scrutiny of the entire Indian mutual fund industry.

The report may also weigh on some smaller stocks held by the fund such as lender RBL Bank Ltd., drug maker Aarti Pharmalabs Ltd. and metal machinery maker Ador Welding Ltd.

[The Hindustan Times]