What is Manipulative Trading and Tactics and SEBI strict laws against this.
                     What is 
Manipulative 
Trading and 
Tactics and SEBI 
strict laws against 
this?
INTRODUCTION
• The stocks on the Indian market are 
exploited even under the presence 
of major regulators such as SEBI 
can sound a little strange to 
newcomers. 
Source: tradebrains.in
Manipulative Trading and 
Tactics
• Often this fraud is found, but much 
of the time it is not, the authorities 
and regulators can also find it 
challenging. 
• This is because a wide range of 
variables influence inventory values 
every day and do not quantify all 
the consequences of these factors.
Source: tradebrains.in
Wash Trading
• In order to produce and raise price, 
a single inventory is sold and 
repurchased here. 
• The quick purchasing and sale 
raises the share's volume and draws 
the buyers who are misled. 
• This occurs when uninformed 
traders get the expectation of 
heightened activity.
Source: medium.com
Brokers and Pledged Shares
• Often promoters contribute a portion 
of their holdings to raise credit, which 
is the normal practice in the industry. 
• This financing is provided by the 
brokers for smaller firms and its size 
makes it impossible for them to be 
considered trustworthy to leverage 
funds from other channels. 
• In general, lenders bid 60-70 percent 
of the value of the undertaken shares.
Source: tradebrains.in
Pump and Dump
• Stock pumping starts with manipulators 
acquiring massive chunks, and then 
making optimistic news with the 
company to raise the stock price. 
• Here uninformed institutional buyers 
are encouraged to purchase these 
stocks, assuming that they are the next 
big business. 
• The high demand contributes to inflated 
rates that complete the pumping 
process. 
Source: medium.com
Short and distort
• Short sales is a totally legitimate 
practise, in the expectation that the 
stock price will collapse quickly, 
helping the short-seller to buy back 
the stock for profit. 
• Short sells can boost market value 
and offer an additional means of 
income for long-term holders 
through credit securities. 
• Unfortunately, this instrument is 
used differently by bear cartels.
Source: tradebrains.in
Spoofing the Tape
• In this scenario, the manipulator 
puts orders on the market without 
ever planning to shop. 
• Other investors see that big orders 
are pending execution and assume 
that a large investor is purchasing 
or selling at a certain amount. 
• The uninformed retail investors 
then order to purchase or sell at the 
same amount.
Source: tradebrains.in
Bear Raiding
• The raid is where a big actor pressures 
rates to be lower by massive sale orders. 
• The manipulator then sells the 
undervalued stock and makes a profit. 
• This occurs while the two are typically 
targeting mid- to large-sized businesses 
under the same basis as poop and scoop. 
• It is less common because the costs of a 
good business are harder to influence 
artificially.
Source: capital.com
SEBI strict laws against 
Manipulative Trading and Tactics 
• More equity brokers are likely to be 
penalised by SEBI for execution of 
‘self trades’.
• SEBI’s action to impose heavy fines 
on a few brokers last year for 
failure to curb self trades has been 
challenged in court.
Source: tradebrains.in
Prohibition of Manipulative, 
Fraudulent and Unfair trade practices
• After SEBI encountered many 
unfair practices, frauds that affect 
the securities market, SEBI passed 
a special regulation pertaining to 
prohibition of manipulative, 
fraudulent and unfair trade 
practices in chapter II (4) of 2003 
regulation. 
Source: economictimes.com