photo Economic Times
The Securities and Exchange Board of India (SEBI) is currently investigating allegations of front-running at Quant Mutual Fund, owned by Sandeep Tandon. The market regulator suspects that certain fund managers at Quant Mutual Fund have engaged in front-running, an unethical and illegal practice in the securities market. This follows regular inspections and audits that flagged concerns over investment-related activities at the fund.
Who is Sandeep Tandon?
Sandeep Tandon, the founder of Quant Group, has over 25 years of experience in the financial services industry. He currently oversees investment decisions for 22 schemes at Quant Mutual Fund. Tandon has previously been a part of the core team at IDBI Asset Management (now Principal Asset Management), served as vice-president at ICICI Securities, and worked with The Economic Times Research Bureau.
Understanding Front-Running
Front-running, also known as forward trading, is an unethical practice where a broker, dealer, or fund manager exploits advance knowledge of a large order that is about to be placed in the market. SEBI defines front-running as the act where brokers, with access to information about investors' orders, use this information to trade in their personal accounts for profit. Essentially, a fund manager who is privy to confidential trading information places a similar trade in a proxy account before the actual large order is executed, thereby benefiting from the anticipated price movement.
About Quant Mutual Fund
Quant Mutual Fund, part of the Quant Group, was incorporated in December 2007 and began operations in 2008 during the Global Financial Crisis. The group operates with two guiding principles: "Being Relevant" and "Predictive Analytics."
- Being Relevant: In a dynamic and volatile market, it is crucial to continuously update knowledge and innovate systems and processes to stay relevant and preserve wealth.
- Predictive Analytics: This involves a comprehensive framework for understanding and forecasting markets across various assets and geographies.
The recent investigation by SEBI into Quant Mutual Fund's practices underscores the importance of regulatory oversight in maintaining market integrity and investor confidence. The outcome of this investigation will be closely watched by market participants and stakeholders.
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