Sebi bars Patel Wealth Advisors, 4 directors over 'order spoofing' charges
Mumbai, Apr 28, 2025
The Securities and Exchange Board of India (Sebi) on Monday debarred stock broker Patel Wealth Advisors and its four directors from dealing in the securities market in alleged fraudulent trading practice of ‘order spoofing’.
In an ex-parte interim order issued on Monday, the regulator has also directed the impounding of Rs 3.22 crore illegal gains from them. Sebi will be undertaking a detailed investigation in the matter.
The market regulator’s findings show that PWA was involved in extensive spoofing activity in both cash and derivatives segments across 173 scrips between January 2021 and January 2025. Their activity resulted in 621 unique spoofing instances.
Order spoofing refers to the illegal practice where one places a bid with the intent to cancel the order before execution and simultaneously executes trades on the opposite side.
Sebi’s findings show that PWA placed multiple large orders in various scrips at prices significantly lower or higher than the prevailing market price without the intention of executing these trades. Such pending orders created a false impression of increased demand or supply in the scrips, thus misleading investors and affecting the price, Sebi noted.
Within a short time frame, PWA made contra transactions and earned wrongful gains. Later, the pending large order was cancelled.
The Sebi order notes that the company continued to indulge in unfair trade practices despite repeated show-cause notices and initial proceedings by the National Stock Exchange (NSE).
“The order spoofing is a manipulative, fraudulent and unfair trade practice employed by PWA to deceive other market participants and profit from price fluctuation. They induced unwary investors in the market. This practise distorted market prices and undermined market efficiency,” noted Sebi whole-time member Kamlesh Varshney in the 41-page order.
The order adds that Sebi has developed capabilities to identify such complex and extensive order book manipulations.
[The Business Standard]
