Sebi Alleges Manipulation of Sensex CAS Through Large Orders
MUMBAI: The Securities and Exchange Board of India (Sebi) has taken decisive action against two entities involved in manipulating the newly introduced Closing Auction Session (CAS) system. In an order released late Wednesday, Sebi found that Copthall Mauritius, a subsidiary of JP Morgan, and Mansi Share & Stock Broking engaged in practices that turned loss-making trades into profits. The regulator has banned both firms from the market and ordered them to disgorge illegal gains totaling Rs 3.76 crore.
Sebi’s investigation revealed that on August 13, during the expiration of the Sensex’s weekly options contracts, Copthall Mauritius placed orders exceeding Rs 191 crore in Sensex constituents. This accounted for 87% of the total trading value in those stocks, with the next highest trade at just Rs 12.2 crore. Within a mere two seconds, Copthall executed nearly all buy orders, significantly above the reference price, resulting in a 362-point surge in the Sensex.
The investigation also noted a subsequent spike in the Sensex, which rose by 133 points shortly after another large order from Copthall. JP Morgan declined to comment on the findings. Meanwhile, Mansi Share & Stock Broking placed aggressive sell orders during the same CAS period, totaling 12.65 lakh shares across eight Sensex scrips, with many orders significantly below the reference price. Shortly after, Mansi canceled these orders, contributing to further market manipulation.
Sebi’s order indicated that Copthall’s actions led to a favorable movement in the Sensex, enhancing the payoff on certain call options while avoiding losses on put options. Mansi’s strategy similarly allowed it to exit certain put positions that would have otherwise expired worthless. The regulator’s actions underscore the need for stringent oversight in trading practices.
Observer Voice is the one stop site for National, International news, Sports, Editor’s Choice, Art/culture contents, Quotes and much more. We also cover historical contents. Historical contents includes World History, Indian History, and what happened today. The website also covers Entertainment across the India and World.
