In its showcause notice, Sebi had alleged that DBS Chola fund managers -- Bajrang Bafna and Anant Deep Katare -- as well as dealer Mayur Joshi had indulged in fraudulent practice of front running by disclosing information regarding trading activity of the fund house to Vikas Kumar Upadhyay and his brother Reshabh Kumar Upadhyay.
Based on the information, the brothers had then allegedly traded ahead of the orders placed by DBS Chola.
Giving Katare and Joshi "benefit of doubt", Securities and Exchange Board of India (Sebi), in separate orders dated September 24, has disposed off "the showcause notice" against them "without any directions".
However, in order against Bafna, the regulator has issued "a strong warning to the noticee, to be careful and cautious as regards his conduct".
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"Any future lapse shall invite stringent action," Sebi said in the order on Bafna.
Sebi rulings are based on, among others, telephone calls records allegedly exchanged between the three individuals and Upadhyay brothers from DBS Chola's official number.
"Though there have been instances of phone calls from the mobile phone of the noticee, in the facts and circumstances of the case, in respect of serious charge of front running, the evidence available is not sufficient enough to indicate that it was the noticee who passed on the information to Upadhyay brothers," Sebi said.
In the case of Katare and Joshi as well, Sebi noted that "no phone calls appear to have been made by the noticee from his mobile phone" and that as the "the telephone calls were made from a common telephone which was also available to other persons sharing the room, it is difficult to come to any conclusion regarding the role of the noticee in the manipulation".
The case related to market regulator's probe into the unusual price movement of several scrips from April 1, 2008 to May 31, 2008.