On Thursday, media reports said that capital markets watchdog Sebi launched a search and seizure operation in a front-running case involving people linked to market experts who appeared on television.

Based on non-public information, the Securities and Exchange Board of India (Sebi) conducted searches and seizures at the official and residential premises of six entities suspected of being involved in front-running.

The media reports said the searches and seizures were carried out at various locations in Jaipur, Kolkata, Noida and Pune without revealing any identities. The investigation process is still ongoing.

Based on surveillance inputs and its internal alert system, Sebi began checking for alleged front-running by persons associated with specific market experts appearing on business news channels.

The modus operandi of these entities is that they take stakes before relevant market experts make recommendations on the channel.

Relying and acting on such recommendations, the said firms would square off their positions when large investors trade in such stocks.

This front-running contravenes the SEBI (Prohibition of Fraudulent and Unfair Trading Practices relating to Securities Market) Regulations, 2003.

In market terms, front-running means buying or selling security ahead of a large order to benefit from subsequent price movements.

During the search and seizure operation, Sebi officials seized various records, including those on mobile phones, laptops, desktops, tablets and hard drives kept by the entities.

The media reports said that data, emails, and other documents are being retrieved from the seized devices and will be scrutinised.