Mumbai: US-based Capital Group said it is the unnamed fund in the Securities and Exchange Board of India’s (Sebi) recent interim order that barred stock market operator Ketan Parekh and his associates from the local securities markets for front-running the investment fund’s trades in the country.The capital market regulator, in its January 2 order, barred both Parekh and Singapore-based Rohit Salgaocar, who was a consultant to Capital Group.”We have worked closely with Sebi in their investigation and can confirm we had no knowledge of the unauthorised use of our order information,” said a Capital Group spokesperson, in response to ET’s e-mailed query.While Capital Group was not accused of any wrongdoing by Sebi, it was directed to take “appropriate actions for strengthening internal controls to prevent the occurrence of violations.”Front-running is an illegal practice of purchasing a stock based on the unpublished information of a sizable transaction. The aim is to profit from short-term outsized moves in these stocks triggered by large trades.The Sebi order had referred to Capital as a ‘Big Client’ without naming the firm. The traders of the fund consulted Salgaocar before placing orders in Indian markets, the regulator said. In turn, he passed on the information to Parekh who, through a network of brokers, executed trades before Capital’s orders.Previously, Parekh was barred from the securities market for 14 years in 2003 for his role in a 2001 scam that involved what came to be known as K-10 stocks, concentrated around media and content makers.Parekh and his associates profited from Capital Group’s trades in Titan, HDFC, PB Fintech, Cholamandalam Investment and Finance, and Tube Investments of India between January 2021 and June 2023, unearthed the regulatory probe.The Sebi investigation showed the trades of Capital were routed through broking firms Motilal Oswal and Nuvama, and the instructions regarding execution of these orders such as details of the stock, time quantity and price of the order, were “dictated” by Salgaocar.According to the regulator, Salgaocar entered into a referral agreement with Nuvama and Motilal for revenue sharing of the brokerage earned on trades of the Capital Group.