Market Regulator Sebi Uncovers Spoofing Scandal

In a significant crackdown, the Securities and Exchange Board of India (Sebi) has identified a unique case of stock price manipulation involving Patel Wealth Advisors and its four directors. The entities reportedly used 'spoofing' techniques to amass illegal gains worth Rs 3.2 crore over three years.

Understanding Spoofing in Stock Markets

Spoofing is a deceptive practice where large orders are placed at prices significantly away from the market rate, only to be canceled later. This manipulates the market by misleading other participants about the actual demand or supply of a stock.

The Impact and Sebi's Response

Sebi's investigation revealed 292 attempts of spoofing across 193 stocks, with one instance involving 543 spoofing orders for Coffee Day shares. The regulator has ordered the disgorgement of illegal gains and imposed a market ban on the involved parties pending further investigation.