Market operator Ketan Parekh has appealed to the Securities Appellate Tribunal (SAT) after SEBI denied his request to cross-examine two traders linked to an ongoing front-running investigation. The case involves allegations of unauthorized use of non-public information leading to suspected gains of nearly ₹66 crore. The tribunal will hear the matter next on August 19, 2026.
Stock market operator Ketan Parekh has escalated a legal dispute with the Securities and Exchange Board of India (SEBI) by approaching the Securities Appellate Tribunal (SAT). The appeal challenges a recent regulatory decision that barred Parekh from cross-examining two traders associated with the Capital Group, a key entity in an ongoing front-running investigation.
The investigation, which dates back to an interim order issued in January 2025, centers on allegations that sensitive non-public information was shared to generate illegal market gains. SEBI has accused various parties of executing trades based on this confidential information, resulting in suspected illicit profits totaling approximately ₹66 crore. As part of the proceedings, the regulator had placed restrictions on the market access of the involved individuals.
The Dispute Over Witness Examination
The current conflict rests on the procedural right to cross-examine witnesses. SEBI had previously granted Parekh the right to cross-examine Rohit Salgaocar, a Singapore-based businessman, after Salgaocar admitted to having direct communication with Parekh. However, the regulator denied a similar request regarding two other traders from the Capital Group. SEBI’s legal representatives argued before the tribunal that these two individuals had no documented prior contact with Parekh, and therefore, cross-examination was not warranted.
Parekh’s legal team is challenging this refusal, arguing that the denial impacts his ability to properly contest the allegations. The outcome of this appeal could set a significant precedent for how cross-examination rights are managed in complex, multi-party SEBI investigations where the degree of interaction between accused individuals varies.
Broader Regulatory Context
This case is part of a wider regulatory sweep. In May 2026, SEBI issued show-cause notices to six Foreign Portfolio Investors (FPIs) linked to the Capital Group, citing lapses in trade confidentiality. These notices underscore the regulator's focus on the systemic handling of market data. The current tribunal proceedings are being closely monitored for the legal questions they raise regarding the scope of evidence gathering and the fairness of SEBI’s investigative processes.
The Securities Appellate Tribunal has granted both sides time to submit further case law and documentation to support their respective positions. The tribunal has scheduled the next hearing for August 19, 2026, where the bench is expected to deliberate further on the validity of Parekh’s appeal against the regulator's order.