The Securities and Exchange Board of India (Sebi) has cracked down on a share manipulation scheme, imposing a collective penalty of ₹50 lakh on four individuals. The regulator found them guilty of artificially inflating the trading volume and price of G G Engineering Ltd. (GGENG) shares while misleading investors through fabricated online content.
The Scheme: Fake Videos and Artificial Trading
In an order passed on Friday, Sebi's Adjudicating Officer Amit Kapoor detailed the fraudulent activities. The four individuals – Manish Mishra, Sunil Bhandari, Rekha Bhandari, and Anshu Mishra – acted in collusion to execute a coordinated plan. Their primary tool was uploading false and misleading videos on YouTube channels to induce investors to buy shares of the company.
As part of this scheme, they actively created artificial volumes in the GGENG scrip. The order further noted that Rekha Bhandari and Sunil Bhandari engaged in order spoofing. This practice involves placing large orders with the intent to cancel them, creating a deceptive picture of high demand and trading activity in GG Engineering shares.
Regulatory Action and Violations
The market watchdog initiated an investigation into the trading patterns of GG Engineering Ltd. Based on its findings, Sebi concluded that the accused had likely breached market norms. A show-cause notice was issued on February 13, 2025, giving the individuals a chance to explain their actions.
After considering the evidence, Sebi held that the quartet violated the Prohibition of Fraudulent and Unfair Trade Practices (PFUTP) regulations. The penalty of ₹50 lakh is joint and several, meaning all four are collectively and individually liable to pay the full amount.
Broader Crackdown on Market Misconduct
In a separate but related enforcement drive on the same day, Sebi issued three other orders targeting manipulation in illiquid stock options. These orders fined three entities a total of ₹16 lakh for executing non-genuine trades on the Bombay Stock Exchange (BSE).
This action stemmed from an investigation into a period from April 1, 2014, to September 30, 2015, where Sebi observed significant trade reversals that created artificial volume in the BSE's stock options segment. These simultaneous orders underscore the regulator's heightened vigil against market integrity violations across different segments.
The case against the four individuals highlights the evolving nature of market manipulation, where social media platforms like YouTube are weaponized to spread misinformation and lure retail investors into fraudulent schemes.
