Recent media reports suggest that the market regulator has ‘enhanced its surveillance’ for possible violations of rules prohibiting insider trading. However, despite the repeated instances of price manipulation and insider trading that we have constantly been trying to highlight, SEBI has chosen to look the other way
It does not get any more bizarre than this. According to a senior official from market watchdog Securities and Exchange Board of India who spoke to the media yesterday, "SEBI has enhanced its surveillance for possible violations of rules prohibiting trading based on prior and inside information."
There's more. According to the market regulator, it has come across "over two dozen instances of major suspected violations of insider trading norms during the recent rally to new record levels above 21,000 level (sic) and the subsequent correction last week."
While it is extremely heartening that SEBI has woken up to this menace, readers of Moneylife know that we have been constantly highlighting cases of insider trading and price manipulation for over two years now.
But no action has been taken against these companies which have wilfully thrown regulatory norms to the winds.
It is well within the regulator's purview to have taken suo moto action against the cases that we have been repeatedly highlighting. But the silence has been deafening.
Here are just a few instances of naked manipulation in a few scrips. We have decided to highlight only those cases which we have unearthed this year, for brevity.
| Company | Stock surge* | Link* | |
| Veritas India | 3227% | www.moneylife.in/article/9788.html | |
| Polygenta Technologies | 2190% | www.moneylife.in/article/6141.html | |
| Prism Informatics | 3149% | www.moneylife.in/article/6692.html | |
| Westlife Development | 4307% | www.moneylife.in/article/6280.html | |
| Nikki Global Finance | 1169% | www.moneylife.in/article/6258.html | |
| Neha International | 1509% | www.moneylife.in/article/6242.html | |
| Supertex Industries | 4140% | www.moneylife.in/article/6337.html | |
| *(Please click on the link for the exact period during which the stock price has zoomed) | |||
ML Bhakta from Kanga & Co has written to Moneylife articulating what a number of investors would feel: "I still wonder whether SEBI will ever wake up to the problem faced by unsuspecting investors - the sudden rise in prices of unknown scrips without any logic or reason, particularly when Moneylife is repeatedly pointing out instances of such cases."
SEBI's senior official (who has not been identified) told reporters: "While the suspicious trading activities have been noticed in SEBI's routine surveillance of market activities, the regulator has decided to probe further into these cases (the ones that SEBI has noted, not the ones Moneylife has been constantly unearthing) and enhance its oversight for such matters going ahead."
"Suspicious activities have been noticed in many other shares also but those are minor (emphasis ours) in terms of trade value and nature," added this official.
But this is another contentious statement. If SEBI had indeed "noticed" suspicious activities in other shares, why has it chosen to ignore them, in its own words, because they are "minor in trade value and nature"; shouldn't the regulator come down hard on each and every case of market manipulation, irrespective of the number of shares, size of the company and value of transactions?
As per SEBI's 'Prohibition of Insider Trading Regulations', an 'insider' is defined as any person "who is or was connected with the company or is deemed to have been connected with the company, and who is reasonably expected to have access to unpublished price-sensitive information in respect of securities of a company, or who has received or has had access to such unpublished price sensitive information."
The regulator supposedly has systems in place to monitor unusual stock trends; suspicious activities are supposed to be probed further for violations of norms - including those regulating insider trading.
But by the looks of it, the free-for-all insider trading might continue unabated - if the powers-that-be don't wake up.
Inside story of the National Stock Exchange’s amazing success, leading to hubris, regulatory capture and algo scam
Fiercely independent and pro-consumer information on personal finance.
1-year online access to the magazine articles published during the subscription period.
Access is given for all articles published during the week (starting Monday) your subscription starts. For example, if you subscribe on Wednesday, you will have access to articles uploaded from Monday of that week.
This means access to other articles (outside the subscription period) are not included.
Articles outside the subscription period can be bought separately for a small price per article.
Fiercely independent and pro-consumer information on personal finance.
30-day online access to the magazine articles published during the subscription period.
Access is given for all articles published during the week (starting Monday) your subscription starts. For example, if you subscribe on Wednesday, you will have access to articles uploaded from Monday of that week.
This means access to other articles (outside the subscription period) are not included.
Articles outside the subscription period can be bought separately for a small price per article.
Fiercely independent and pro-consumer information on personal finance.
Complete access to Moneylife archives since inception ( till the date of your subscription )
READERS PL READ TO SEE WHO ARE REAL CULPRITS FOR MF INDUSTRY-IFAS HAVE BEEN BRUTALLY HAMMERED FOR NO FAULT OF THEM AND BANKS ARE MAKING MONEY WITH LOT OF LOSS(1% EXIT LOAD TO BE PAID EACH TIME) TO INVESTORS-WHY NOT SEBI BANNING THESE CULPRITS-AMCs NOT SUPPORTING IFAs?
By saying "ML has acted on same lines like other paid media by removing those pages", you have insulted the integrity of Moneylife team. The same team is standing tall in order to protect common investors and in fact had to pay a big price for it. MDT does not easily get invitations and responses from companies with maligned interest and so on. But we keep our motto intact.
As Mr Basu has pointed out, we have certain space limitations on the homepage and hence cannot post each and everything on it. As new stories are uploaded, old stories moves on to inside pages. This is generic to all media sites.
2. One of the items you are referring to is here
http://moneylife.in/article/81/10975.htm...
The other one is also there, if you search
3. Not everything cannot be in the home page forever
4. How is it that you start accusing us once you have the slightest suspicion, without giving us the benefit of doubt ? What does it say about your mind?
5. Now that you have abused us, you should consider not posting here again
i have always been agreat fan of you all-that was the reason i went to meet you all and see personally travelling from Surat many months ago-because i had read your articles which were very offline and based on ground realities and very much in support of the deprived(and this is continuing is a relief),
i just wanted to meet the people who were working with great courage against a established system with limited resources without back up of any industrial or corporate house,
i remember the article headline "CAN SEBI BE HELD ACCOUNTANBLE FOR TURMOIL"-these courageous words made me emotion to meet the people behind these words -so i came to mumbai to just meet them personally,
i have no doubts about good intentions with which you all are working but sometimes some silly mistakes from either end craetes some misunderstandings.
putting those pages which i meant removal have been re entered is a good surprise-i was worried about this because many of IFAs were having continuous exchange of thoughts and planning to make protests and we even pointed about misdeeds of AMCs-
i hope your editing team will remove only those pages which are exhausted and lost interest of readers.
Thanks a lot for all support we have received from you all and very very sorry if i hurted with no intention of doing so.
with all respect i admire all your efforts and hope this support will continue for all those who are sufferers to the established system.
-ROOPSINGH
you continue to insist that the pages were removed and re-entered. We are pointing out that nothing was removed. pages simply go off the front page and you need to search for them.
you must make an attempt to learn how internet websites work.
Most importantly, we have no reason at all to remove the pages -- unless you can think of some reason / interest that could possibly apply, why not refrain from jumping to conclusions and making allegations? this is not the first time you have done it.
I am really tired of writing on comments without any fruitful outcome since last couple of months-writing is not my earning like yours-considering my self as a very small IFA i always tried to put maximum of my self through my posts-very few of IFAs are regular commentors like me-and i have written my above comment based on a telephonic talk with one of commentator in your web page who informed me about removal of our discussion page-(while older pages are still there)-i cannot name that person because he is regular visitor to your web magazine.
I am really really tired now to keep on writing same things for so long-without any result-
i feel sorry if you took my comment negatively-i have commented it as a eye opener what readers are feeling about such removal(as felt by the fellow who informed me by phone about removal from home page)-but this has been taken with negative aspect from your end-
and if you really wish i should not write just because i criticised you-i am not going to write any more-after all i am not only person who is suffering-
let others should take initiative to take pains to write-
i would not put my comments till you do not take back your words.