Shares of IIFL Securities saw a decline of up to 2 percent, dropping to Rs 222 apiece on June 27, following reports that the Securities and Exchange Board of India (SEBI) is investigating market expert Sanjiv Bhasin for alleged stock market manipulation and front-running.

This investigation has led to scrutiny of Bhasin's digital devices as part of the evidence collection process.

Despite this recent dip, IIFL Securities' stock has shown impressive performance throughout the year, with an increase of over 55 percent, significantly outpacing the benchmark Nifty 50 index, which rose by 9 percent in the same period.

However, the news of SEBI's probe has cast a shadow over its recent success.

Front-running, the practice at the heart of SEBI's investigation, is considered unethical.

It involves a broker or trader taking advantage of advance knowledge of pending orders from their clients to execute trades that benefit them personally.

By entering into trades before executing the client's orders, the broker can either profit or avoid losses, thereby compromising the integrity of the market.

Sanjiv Bhasin, a well-known figure in the financial market and a frequent guest on financial news channels, had his contract with IIFL Securities terminated following the disclosure of SEBI's investigation.

His contract was originally set to end on June 30, 2024, but due to health reasons, it was prematurely discontinued on June 17, 2024.

In response to the unfolding situation, IIFL Securities released a statement saying, "Bhasin informed us about SEBI's enquiry, but the details were not disclosed to us.

Hence, we will not be able to comment further. Please note that he was not a member of the board of directors of IIFL Securities Ltd or any other group company or affiliates."

As the investigation progresses, the market will be closely watching for any further developments and their potential impact on IIFL Securities and its stock performance.