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Ketan Parekh Scam: On one hand, the Indian stock market is suffering due to withdrawal of money by foreign investors. On the other hand, scammers like Ketan Parekh have also tarnished the image of the market. Recently, SEBI banned three people including Ketan Parekh from the Indian stock market on charges of a ‘front-running’ scam. They are accused of illegally earning a profit of Rs 65.77 crore in minutes. Let us now tell you what is front-running and how scammers earn money from it.
What is front-running?
Front-running is a type of scam, which scammers carry out in the stock market. Understand this fraud in such a way that the broker or trader already has information about the deal of some shares and taking advantage of that information, he buys or sells those shares whose deal is about to happen even before the deal. By doing this, these brokers or traders easily earn crores of rupees in minutes.
In simple language, these front-running scammers are a kind of dark ghosts, who are not visible to the dealing company, but are always around them. Ketan Parekh and his associates are such dark ghosts, who work for different stock broking firms and then earn money illegally by taking information from there.
How did Ketan Parekh commit such a big scam?
According to market regulator SEBI, Ketan Parekh’s network was quite widespread. Many other names including Ashok Kumar Poddar were associated with this network. These people worked for Kolkata’s stock firms GRD Securities and Salasar Stock Broking. All these people used to deal in those shares which Tiger Global was going to deal in future. This whole scam was being done from many mobile numbers. The mastermind of this scam was actually Ketan Parekh and he along with his associates earned more than Rs 65 crore through front running scam.
