SEBI Acts Tough against Market Manipulators

The Securities and Exchange Board of India (SEBI) on 16th September, 2022, passed a stiff order of penalty, on a case involving, among others, allegedly synchronised trades. By the other order, it also debarred some of the parties from the securities markets. Soon thereafter, in June 2023, the Securities Appellate Tribunal (“SAT”) rejected the appeals against the order in an almost dismissive way to the appeal. What is noteworthy is that SEBI has shown that it means serious business in such cases. The penalty levied is fairly large, considering the facts and figures involved, apart from the order to restrain persons from the markets. This should hopefully show that SEBI now means business in tackling this almost uniform feature in cases of market manipulation. If this approach continues, this should mean that the manipulators see a strong deterrent to engaging in such activities.

SYNCHRONISED MANIPULATIVE TRADING

Price manipulation is rarely carried out without involving synchronised trading. But, such cases have seemingly gotten away without strong deterrent penal measures. The use of synchronised trades has been a regular feature for decades.

The pattern is almost consistent in such cases. The manipulators, using blatant or camouflaged techniques, use this modus operandi with successful results. Small investors r