P-Notes Market Manipulation Probe

The Securities and Exchange Board of India has intensified its scrutiny of market participants, examining trading activities by both domestic and international entities to protect retail investors. Investigators focused on transactions executed during the Closing Auction Session on August 3 and 4 to determine if any trades were manipulative, after market participants raised concerns over sharp differences in index levels.

In another action, regulators alleged that a Mauritius-based unit of JPMorgan Chase & Co. and a domestic firm placed outsized orders in Sensex stocks during closing auctions, accounting for a large percentage of orders before cancelling large portions to influence prices. Both entities deposited nearly 3.7 crore rupees in combined unlawful gains to comply with an order, allowing trading bans to be lifted while investigations continue.

Additionally, the regulator probed a seven-member family for allegedly using social media platforms like Telegram, WhatsApp, and X to circulate stock recommendations and artificially inflate prices of Small and Medium-sized Enterprise scrips for wrongful gains. Investigators conducted search and seizure operations, seizing electronic devices and recording statements after noting substantial increases in gross trade values and profits.

Not yet reported: The final court outcomes and final adjudication orders for all named foreign and domestic entities are not fully detailed.