How Ketan Parekh Exploited a $2.6 Trillion Global Fund: SEBI’s Latest Revelation

India’s financial markets have once again been rocked by revelations of alleged manipulation, with the Securities and Exchange Board of India (SEBI) uncovering a scheme targeting Capital Group, the Los Angeles-based fund manager overseeing $2.6 trillion in global equity investments.

In an interim order, SEBI identified Capital Group—referred to as the “Big Client”—as the victim of a calculated operation orchestrated by Ketan Parekh, a former stockbroker infamous for his involvement in one of India’s largest financial scams two decades ago. Parekh, who had been banned from the markets for 14 years, allegedly exploited legitimate trades to generate illegal profits.

The regulator has taken swift action, barring Parekh and other implicated individuals from trading and directing them to return 658 million rupees ($7.8 million) of alleged illicit gains. SEBI’s ex parte order aims to prevent the further dissipation of unlawful profits. Those named in the order have 21 days to request a personal hearing or challenge the decision in court.

This case, coupled with another recent front-running scandal, raises concerns about the vulnerabilities global investors face when entering Indian markets. While Capital Group confirmed its involvement, no public statements have yet been made by the accused or their legal representatives regarding their next steps.

As SEBI strengthens its regulatory measures, this episode serves as a reminder of the ongoing need for robust safeguards to protect investor confidence in India’s financial markets.