Mumbai, Oct. 30 -- A recent Securities and Exchange Board of India (Sebi) order in a complex front-running case is testing a critical aspect of securities law: can secondary players in a fraudulent scheme be held liable if the masterminds settled the case without admitting guilt?

On 24 October the markets regulator penalized 13 entities for their role in a scheme that allegedly netted over Rs.2 crore in illegal gains. The case is notable because the main accused-Kuntal Goel, the tipper; Jitendra Kewalramani, the front-runner; and Samir Kothari, an intermediary-settled with Sebi in December 2024 without admitting any wrongdoing.

Under the terms of the settlement, the three paid fees ranging from Rs.55.90 lakh to Rs.64.29 lakh, surrendere...