SEBI, the market regulator, has carried out raids across more than 100 locations targeting individuals and entities involved in stock market operations. This includes brokers, traders, investment firms, and various market participants. The focus of these raids is on those suspected of engaging in share price manipulation and the improper offloading of shares from smaller companies.
The operations, concentrated in Gujarat, aim to curb illegal activities in the stock market. Specifically, the targeted stock market operators are allegedly involved in practices such as share price rigging and the unauthorized dumping of shares from smaller companies. Surveillance officials from SEBI are actively participating in these raids.
This recent action marks the second series of raids within six months. In June, SEBI conducted similar operations, targeting six entities linked to a major market operator. These entities were accused of front-running trades made by foreign portfolio investors (FPIs). Notably, five of the raided brokers were based in Kolkata, with one in Mumbai. The identified market operator, associated with these entities, has a history of regulatory scrutiny and is known for employing benami fronts for trading in the market.
During the June raids, SEBI had evidence suggesting that these brokers and entities were involved in front-running the trades of large foreign portfolio investors. Front-running refers to the unethical practice of executing trades on a security for one’s own account while taking advantage of non-public information from pending orders of other investors. The regulator has taken serious measures against the market operator believed to be orchestrating these activities.
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