Mumbai: Insurance behemoth Life Insurance Corporation of India (LIC), a government-owned entity, said on Wednesday that it terminated the employment of a worker banned by the Securities & Exchange Board of India (SEBI) for involvement in a front-running incident, according to a stock market filing.
SEBI’s investigation last year revealed that Yogesh Garg, an LIC dealer, possessed confidential information about forthcoming LIC orders and facilitated its dissemination, reported Business Standard.
There is evidence suggesting that he traded using the account of the deceased Ved Parkash Garg based on this privileged information from LIC, the report said.
According to the exchange note by LIC, “He (Yogesh Garg) has been removed from the services of the Corporation following the due administrative procedure by the disciplinary authority consequent to his involvement in the front running.”
The insurance company further stated that it follows a strong monitoring system and implements best practices to prevent any instances of front-running.
Stringent measures are in place to safeguard the integrity of transactions in the dealing room, including biometric entry, CCTV surveillance, and restrictions on electronic devices.
In April 2023, the Securities & Exchange Board of India (SEBI) banned five entities, including an employee of LIC, from taking part in the securities market.
SEBI also seized illicit profits equalling Rs 2.44 crore, which were made through front-running trades involving the state-owned insurer.
In its order, the SEBI had said, “The Interim Order was passed based on the prima facie conclusions to prevent further perpetration of fraudulent trading activity and to prevent defalcation of the wrongful gains cumulatively amounting to Rs 2.44 crore (as elaborated in the Interim Order).”
SEBI identified Yogesh Garg, who worked in LIC's investment department, along with his mother Sarita Garg, mother-in-law Kamlesh Agarwal, Ved Prakash, and another individual named Sarita Garg. These five people share familial ties, reside at the same address, and share a common phone number, establishing their interconnectedness, the report said.
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