Admissions by both tipper and tippee and documented weekly commissions establish liability for front-running.

SEBI conducted an investigation into suspected front-running activities between January 1, 2022, and June 30, 2023.

The investigation revealed that Ashish Sarda (Noticee No. 6), a dealer at Thar Share Brokers Pvt. Ltd., acted as an information carrier.

He allegedly leaked details of upcoming trades by "Big Clients" (connected to Ajay and Rakhi Gangwal) to his cousin, Vikas Sarda.

Vikas Sarda executed trades on behalf of himself, his wife Preeti Sarda, and his HUF based on these tips.

Bank records showed weekly "commission" payments of approximately ₹13.86 lakhs from the appellants to Ashish Sarda.

On November 28, 2024, the Quasi-Judicial Authority of SEBI issued an order directing disgorgement of ₹1.43 crore (joint and several), debarment from the market, and a penalty of ₹5 lakhs each.

The appellants challenged this order, citing a lack of cross-examination and insufficient evidence of fraud.

Whether the appellants engaged in front-running and violated PFUTP Regulations based on the information provided by an insider.

Whether the non-granting of cross-examination of the information carrier (Ashish Sarda) vitiated the proceedings.

Whether the penalties and disgorgement directions imposed were proportionate to the alleged violations.

The Tribunal primarily applied the Securities and Exchange Board of India (Prohibition of Fraudulent and Unfair Trade Practices relating to Securities Market) Regulations ("PFUTP Regulations") which prohibit "front-running"—trading in securities while in possession of non-public information regarding impending block trades.

It further applied Section 15HA of the SEBI Act, 1992, which mandates penalties for fraudulent and unfair trade practices.

Regarding evidence, the Tribunal looked to the principle of "admissions" under the Indian Evidence Act (contextually applied in quasi-judicial proceedings), noting that facts admitted need not be further proved or subjected to cross-examination.

The Tribunal found that the nexus between the tipper (Ashish) and the tippees (the appellants) was incontrovertibly established through Call Data Records (CDRs) and financial statements showing systematic weekly commission transfers.

Crucially, the Tribunal relied on the statements made on oath by both Ashish Sarda and Vikas Sarda.

Ashish admitted to sharing confidential trade info for a 60:40 profit-sharing ratio.

Vikas admitted to receiving these tips and paying commissions.

The Tribunal rejected the plea for cross-examination, noting the appellants had not requested to cross-examine Ashish Sarda during the original adjudication and, regardless, Vikas's own admission of the modus operandi rendered cross-examination unnecessary.

The synchronized trading pattern with the Big Clients corroborated the "fraudulent" intent required under PFUTP Regulations.

It held that the evidence, specifically the concurrent admissions and the clear money trail, proved the charge of front-running.

The Tribunal affirmed the directions for disgorgement of ₹1.27 crore (as calculated in the investigation) and found the ₹5 lakh penalty per appellant to be the legal minimum under Section 15HA, and thus not excessive.

The debarment and joint/several liability for disgorgement were upheld.