Market regulator Sebi today said it has decided to drop proceedings against L&T Investment Management, the asset management company of L&T Mutual Fund, in a case relating to front-running by one of the company's employees.
The decision to drop proceedings was taken after the firm, formerly known as DBS Cholamandalam Asset Management, filed an application proposing willingness to pay Rs 10 lakh as settlement charges, without admitting or denying the guilt.
"The acceptance of the consent proposal was communicated to the Noticee (L&T Investment Management) by Sebi ... It is hereby ordered that this consent order disposes of the ... adjudication proceedings pending against the Noticee under the Sebi Act," the market regulator said.
The case against L&T Investment Management relates to one of its employees, Vikas Upadhyay, who was charged with front- running of the orders of the firm, which means that he tipped of some other party before the execution of the firms' orders, resulting in the gains for his acquaintances.
The decision to drop proceedings against the firm was taken after review by Sebi's High Powered Advisory Committee and a panel of its whole-time members.
L&T Investment Management was alleged to have failed to exercise due diligence and care by not taking adequate measures to ensure that leakage of information pertaining to its trading strategy with others was not observed.
In a case of similar nature, Sebi had earlier this year barred HDFC AMC Assistant Vice-president (Equity) Nilesh Kapadia for helping one of his acquaintance and two others to gain from HDFC MF products at the cost of unit holders. Three other persons were also barred as his beneficiaries.
