SEBI Launches Major Raids Across 100 Locations In Gujarat Targeting Stock Market Fraud

The Securities and Exchange Board of India (SEBI) is currently conducting extensive raids across approximately 100 locations in Gujarat. These operations target stock market operators accused of illegally manipulating share prices and unloading shares of smaller companies.

What Happened? According to a BW Businessworld report, operators have been using platforms like Facebook, YouTube, Reddit, and Instagram to attract investors. They then funnel these investors into WhatsApp groups.

The strategy involves accumulating shares of obscure companies and subsequently selling them to retail investors through ‘stock tips’ shared in these groups.

SEBI’s findings: Investigations have revealed instances of circular trading and price manipulation, particularly in shares of small companies, capitalizing on the current bullish market trend.

See also: Robin Raina’s Ebix Inc. Is Bankrupt But How Does That Impact EbixCash And Its IPO Plans?

In June, SEBI raided six entities linked to a prominent market operator known for front-running trades of foreign portfolio investors (FPIs). However, these raids did not lead to significant regulatory actions.

Despite evidence of front-running by US-based FPIs since 2022, SEBI did not pursue aggressive follow-up actions or issue immediate “Ex-Parte orders,” which are typical in cases of severe violations.

This latest series of raids indicates SEBI’s renewed efforts to clamp down on market manipulation and protect investor interests.

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