SEBI bars 26 traders for price manipulation

The Securities and Exchange Board of India (SEBI) has taken strict action against alleged price manipulation in the shares of DU Digital Global, a company listed on the SME platform. The market regulator has barred 26 individuals from trading in the securities market after finding that they were involved in artificially inflating the stock price.

In a detailed 142-page order, Sebi has directed the individuals to return illegal gains amounting to more than Rs 98.78 lakh. In addition, it has imposed monetary penalties totalling Rs 1.85 crore. The regulator’s action follows an investigation into an unusually sharp rise in the share price of DU Digital Global, which jumped from around Rs 12 in August 2021 to a peak of Rs 296.05 in November 2022.

According to the market regulator, the steep rise in the stock price was not supported by the company’s business performance or any positive corporate announcements. The regulator noted that there was no legitimate reason for the share price to surge by about 2,467 per cent within a year.

The investigation found that a group of connected traders had used deceptive and coordinated trading strategies to create artificial demand and trading volumes in the stock. SEBI observed that such practices, including synchronised and circular trades, serve no genuine economic purpose and are aimed only at misleading investors by manipulating prices.