SEBI Imposes ₹1.85 Crore Penalty, Bars 26 Individuals from Market After Finding Price Manipulation

The capital markets regulator has taken enforcement action against multiple individuals after concluding that coordinated trading activity led to an abnormal rise in the price of an SME-listed company’s shares. 

Regulatory Action and Financial Penalties 

In a detailed 142-page order, the Securities and Exchange Board of India barred 26 individuals from accessing the securities market for periods ranging from 1 year to 30 months.  

SEBI also imposed cumulative penalties of ₹1.85 crore and directed disgorgement of more than ₹98.78 lakh identified as unlawful gains.  

The action followed an investigation into trading in DU Digital Global, where the share price climbed sharply from ₹12 in August 2021 to a peak of ₹296.05 in November 2022, representing a surge of 2,467% within about a year. 

Trading Patterns and SEBI’s Findings 

The regulator found that a group of connected traders employed deceptive strategies that artificially inflated both price and trading volumes in the stock. SEBI observed that synchronised and circular trades had no economic rationale other than manipulation and were detrimental to market integrity.  

It also noted that some of the individuals involved had faced regulatory action in earlier cases. In its order, SEBI stated that coordinated price manipulation causes losses to investors and that strong enforcement is necessary to deter such conduct and maintain confidence in SME market trading. 

About DU Digital Global  

DU Digital Global, earlier known as DU Digital Technologies, was listed on the NSE SME platform in August 2021. SEBI noted that there were no positive corporate developments or disclosures during the period under review that could have justified the steep rise in the company’s share price. 

Read More: SEBI Launches ₹18 Crore Recovery Action Against ‘Baap of Charts’ and Associates for Unregistered Investment Advisories! 

Conclusion 

By imposing market bans on 26 individuals along with monetary penalties and disgorgement, SEBI has reinforced its stance against manipulative practices in the SME segment, underlining its focus on protecting investors and preserving orderly market functioning. 

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.  

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