India’s securities regulator, SEBI, has launched a sweeping investigation into approximately 200 listed companies suspected of using pump-and-dump tactics. Over the past three days, it conducted searches at more than 80 locations, seizing data from over 100 computers and 150 mobile phones to collect evidence
What Triggered the Action?
This operation follows SEBI’s June raid and seizures targeting pump-and-dump schemes. Earlier that month, SEBI confirmed the recovery of incriminating evidence from raids in multiple cities, including Ahmedabad, Mumbai, and Gurugram, related to scams worth ₹3 billion (~US $35 million). The regulator also took action against 15–20 shell entities linked to agro-tech stocks.
How Do Pump‑and‑Dump Schemes Work?
In a pump-and-dump setup, manipulators buy large volumes of low-priced shares, artificially inflate prices with misleading promotions, then sell at the peak. Retail investors often end up holding overpriced shares as the price crashes—resulting in substantial losses
SEBI’s Investigation Scale
- Searches conducted at 80+ locations over three days
- Data seized from 100+ computers and 150+ mobile phones
- Targeted nearly 200 listed private firms under suspicion
Broader Enforcement Trend
SEBI’s aggressive action follows a spike in irregular market behaviors:
- In FY 2024, SEBI initiated 342 investigations, the highest in three decades, thanks to enhanced monitoring tools
- Over FY 2019–24, it recorded 6,717 cases and recovered ₹1,083 crore via disgorgements
What Investors Should Do
- ⚠️ Stay cautious with heavily promoted small-cap stocks
- ✅ Verify promotions from official sources and SEBI-registered intermediaries
- 📚 Keep an eye on SEBI notices for corporate actions like raids or show-cause orders
Regulatory experts believe SEBI’s robust oversight will improve market integrity.
What’s Next?
SEBI will examine the seized evidence and issue show-cause notices to implicated firms. Witness protection and whistleblower data may follow. Depending on findings, the regulator could impose fines, restrict market access for violators, and even take legal action against promoters.
Summary
SEBI is probing around 200 firms in a major pump-and-dump investigation involving raids, data seizure, and suspected price manipulation. Acting amid a rising wave of market irregularities, SEBI continues to tighten surveillance and enforcement to protect retail investors and market fairness.
