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Quant Mutual Fund has informed its investors that the market regulator’s data collection was part of a court-approved search-and-seizure operation, not a routine inquiry. On July 13, the mutual fund sent an email to its investors to clarify this matter.
Finwealth first reported that the Securities and Exchange Board of India (Sebi) conducted search-and-seizure operations at the mutual fund house. This was part of an investigation into suspected front-running of trades. Following this, Quant informed its investors that it had received “inquiries from Sebi.” Initially, the mutual fund described the Sebi inquiry as a “regular ongoing process globally by regulators to collect data and analyze it.” The latest communication aims to clarify this statement, specifically addressing the first question in the FAQs.
In the most recent email, Quant Mutual Fund stated, “This has reference to question 1 of the FAQs in the trailing email. We have been receiving further queries in this regard. We would like to clarify that the data collected by the regulator was not part of any regular process but was part of a court-approved search and seizure operation with respect to an ongoing investigation initiated by SEBI.”
Legal experts emphasize that search-and-seizure operations are more serious than standard regulatory inquiries. Vasudha Goenka, a partner at Cyril Amarchand Mangaldas, explained, “A search and seizure operation is carried out pursuant to the investigating authority of SEBI obtaining an order from the magistrate or judge of the designated court under Section 11C (9) of the SEBI Act.” She added, “This operation grants the investigating authority lawful power to enter premises, search, and seize documents deemed necessary, which is more intrusive than other types of inquiries.”
This development underscores the gravity of the ongoing investigation into the mutual fund house, impacting the stock market and finance sector in India.
