Quant Mutual Fund, one of India’s rapidly expanding asset managers, is under investigation by the Securities and Exchange Board of India (Sebi) for suspected front-running activities, according to a report by The Economic Times.
Front-running involves the illegal practice of executing trades based on privileged information ahead of larger client transactions. In its investigation, Sebi has conducted search and seizure operations at Quant’s Mumbai headquarters and at the locations of suspected beneficiaries in Hyderabad, sources cited by The Economic Times revealed.
Sebi’s surveillance system detected that certain entities’ transactions closely mirrored those of Quant Mutual Fund, raising concerns about potential information leaks. A source familiar with the investigation noted, “Sebi’s surveillance system flagged alerts when transactions of suspected entities matched those of Quant Mutual Fund. The question is, how does it match?”
Sebi suspects that a dealer from Quant or a broking firm handling the fund’s orders may have leaked trade information. During the search operations, Sebi confiscated digital devices, including mobile phones and computers, to collect evidence. The examination of these devices aims to identify the source of the confidential trade information leaks.
Following initial findings, Sebi plans to question individuals with access to Quant’s trade information. The investigation will focus on executives who had knowledge of the size and timing of orders and who might have shared this information with external parties.
Quant Mutual Fund’s Response
In response to the situation, Quant Mutual Fund issued a statement confirming that it had received inquiries from Sebi and assured its investors of full cooperation with the market regulator.
“As a policy, we don’t comment on media reports. However, we wish to maintain transparency with all our stakeholders by providing an important update. Recently, Quant Mutual Fund received inquiries from Sebi, and we aim to address any concerns regarding this matter,” the statement read.
Quant Mutual Fund emphasized its status as a regulated entity and its commitment to cooperating fully with Sebi throughout the investigation. “We will provide all necessary support and continue to furnish data to Sebi as required,” the fund stated.
The fund highlighted its growth and performance, noting, “Quant Mutual Fund has emerged as one of the fastest-growing and best-performing fund houses in the country across most schemes. Our primary goal remains to deliver superior risk-adjusted returns to all our valued investors. Your confidence in Quant Mutual Fund is of utmost importance to us, and we are dedicated to maintaining transparency and adherence to regulatory standards.
