SAT rejects Parekh's plea to cross-examine Capital Group traders

The Securities Appellate Tribunal (SAT) has rejected a plea by Ketan Parekh to cross-examine traders from Capital Group in connection with alleged front-running activities, according to regulatory sources.

Parekh had sought permission to examine the Capital Group traders as part of his appeal against the Securities and Exchange Board of India (Sebi) action initiated earlier this year. The move was part of his defence strategy in the case involving suspected manipulation of trades belonging to a US-based foreign portfolio investor.

Sebi issued an order in January 2025 barring both Parekh and Singapore-based trader Rohit Salgaocar from the securities market following allegations that they engaged in front-running—trading ahead of a client's order to profit from anticipated price movements. Front-running is considered a violation of market conduct regulations and undermines investor protection.

The dismissal of Parekh's cross-examination request by SAT narrows his available options for contesting the regulator's findings. The tribunal's decision reflects the procedural framework governing appellate proceedings in securities law matters.

The case highlights Sebi's ongoing efforts to detect and penalise market manipulation practices, particularly those involving foreign institutional investors whose trading patterns may be exploited by domestic market participants.