𝐒𝐄𝐁𝐈’𝐬 𝐒𝐩𝐨𝐨𝐟𝐢𝐧𝐠 𝐂𝐫𝐚𝐜𝐤𝐝𝐨𝐰𝐧: 𝐀 𝐖𝐚𝐤𝐞-𝐔𝐩 𝐂𝐚𝐥𝐥 𝐟𝐨𝐫 𝐌𝐚𝐫𝐤𝐞𝐭 𝐈𝐧𝐭𝐞𝐠𝐫𝐢𝐭𝐲 𝐚𝐧𝐝 𝐭𝐡𝐞 𝐍𝐞𝐞𝐝 𝐟𝐨𝐫 𝐋𝐞𝐠𝐚𝐥 𝐂𝐥𝐚𝐫𝐢𝐭𝐲

SEBI has passed an interim order against Patel Wealth Advisors Pvt. Ltd. (PWAPL) for alleged market manipulation through spoofing. The regulator’s forensic investigation, covering three years and 173 stocks, revealed systematic placement and cancellation of large orders to create misleading market signals. The conduct resulted in unlawful gains of ₹3.22 crore, which SEBI has impounded. The entity and its directors have been barred from trading until further notice.

While this move marks a strong enforcement message against sophisticated market abuse, it also raises questions about the legal foundation. Spoofing is not explicitly defined under SEBI’s PFUTP regulations, and the regulator’s reliance on broad provisions continues to draw scrutiny.

In an insightful article of Mint titled 𝐖𝐡𝐚𝐭 𝐒𝐞𝐛𝐢’𝐬 𝐬𝐩𝐨𝐨𝐟𝐢𝐧𝐠 𝐜𝐫𝐚𝐜𝐤𝐝𝐨𝐰𝐧 𝐦𝐞𝐚𝐧𝐬 𝐟𝐨𝐫 𝐭𝐡𝐞 𝐬𝐭𝐨𝐜𝐤 𝐦𝐚𝐫𝐤𝐞𝐭 by Neha Joshi, Mr. Sumit Agrawal, Managing Partner at Regstreet Law Advisors, notes that “𝘵𝘩𝘦 𝘳𝘦𝘭𝘪𝘢𝘯𝘤𝘦 𝘰𝘯 𝘱𝘳𝘦𝘤𝘦𝘥𝘦𝘯𝘵𝘴 𝘭𝘪𝘬𝘦 𝘵𝘩𝘦 𝘕𝘪𝘮𝘪 𝘌𝘯𝘵𝘦𝘳𝘱𝘳𝘪𝘴𝘦 𝘰𝘳𝘥𝘦𝘳, 𝘯𝘰𝘸 𝘴𝘵𝘢𝘺𝘦𝘥 𝘣𝘺 𝘚𝘈𝘛, 𝘢𝘯𝘥 𝘶𝘯𝘥𝘦𝘳 𝘤𝘩𝘢𝘭𝘭𝘦𝘯𝘨𝘦, 𝘪𝘭𝘭𝘶𝘴𝘵𝘳𝘢𝘵𝘦𝘴 𝘵𝘩𝘦 𝘧𝘭𝘶𝘪𝘥 𝘭𝘦𝘨𝘢𝘭 𝘵𝘦𝘳𝘳𝘢𝘪𝘯 𝘢𝘳𝘰𝘶𝘯𝘥 𝘚𝘌𝘉𝘐’𝘴 𝘴𝘱𝘰𝘰𝘧𝘪𝘯𝘨 𝘫𝘶𝘳𝘪𝘴𝘱𝘳𝘶𝘥𝘦𝘯𝘤𝘦.” He also emphasised “𝘵𝘩𝘦 𝘣𝘳𝘰𝘢𝘥𝘦𝘳 𝘤𝘰𝘯𝘤𝘦𝘳𝘯 𝘪𝘴 𝘵𝘩𝘦 𝘪𝘯𝘤𝘳𝘦𝘢𝘴𝘪𝘯𝘨 𝘳𝘦𝘭𝘪𝘢𝘯𝘤𝘦 𝘰𝘯 𝘨𝘦𝘯𝘦𝘳𝘢𝘭 𝘢𝘯𝘥 𝘸𝘪𝘥𝘦𝘭𝘺 𝘸𝘰𝘳𝘥𝘦𝘥 𝘱𝘳𝘰𝘷𝘪𝘴𝘪𝘰𝘯𝘴, 𝘸𝘩𝘪𝘤𝘩 𝘤𝘢𝘯 𝘳𝘦𝘯𝘥𝘦𝘳 𝘰𝘶𝘵𝘤𝘰𝘮𝘦𝘴 𝘷𝘢𝘳𝘪𝘢𝘣𝘭𝘦 𝘥𝘦𝘱𝘦𝘯𝘥𝘪𝘯𝘨 𝘰𝘯 𝘵𝘩𝘦 𝘪𝘯𝘵𝘦𝘳𝘱𝘳𝘦𝘵𝘢𝘵𝘪𝘰𝘯𝘢𝘭 𝘢𝘱𝘱𝘳𝘰𝘢𝘤𝘩 𝘰𝘧 𝘢 𝘞𝘩𝘰𝘭𝘦 𝘛𝘪𝘮𝘦 𝘔𝘦𝘮𝘣𝘦𝘳 𝘰𝘧 𝘵𝘩𝘦 𝘥𝘢𝘺.”

A copy of the article is attached for reference.