A stock broker and its associates have been ordered to return over ₹3.22 crore in illegal profits after being found guilty of “spoofing”—manipulating stock demand with false orders. Patel Wealth Advisors Pvt Ltd (PWAPL) has also been barred from trading through its proprietary account, and its directors have been banned from the securities market.
In an order dated April 28, the Securities and Exchange Board of India (SEBI) explained how its investigation uncovered large-scale spoofing in India for the first time. While an earlier case in 2023 involved Nimi Enterprises manipulating the cash segment for eight months, PWAPL’s spoofing covered both cash and derivatives markets over a period of three years.
SEBI’s investigation found spoofing across 173 stocks over 292 trading days, totaling 621 unique spoofing incidents. The broker would place large fake orders well below market price to create an illusion of strong demand or supply, luring other investors into trading, and then profit by trading on the opposite side.
Whole-time Member Kamlesh Varshney described spoofing as a fraudulent trading tactic where orders are placed with no intention of execution, solely to manipulate market perception. These phantom orders mislead genuine investors, distort stock prices, and damage market efficiency.
Given the repeated nature of PWAPL’s manipulative activities, SEBI said an interim order was necessary to protect the market’s integrity and prevent further harm to investors. Varshney emphasized that allowing PWAPL to continue would severely undermine trust in the securities market.
