Key Points
Securities and Exchange Board of India (SEBI) issued an interim restraining order on 135 entities accessing the securities market and fined them about 1.26 billion rupees for making wrongful gains from alleged stock manipulation of small-cap companies through bulk messages...
The entities first pushed up stock prices by trading among themselves and followed it up by sending "buy" recommendations to the public through bulk messages via texts and websites, said SEBI..
SEBI said the scheme involved three major sets of entities PV (Price Volume) Influencers, SMS sender and off loaders apart from using a large number of entities who were apparently mule or conduit entities to operate the fraudulent scheme in these scrips..
As per the first leg of the scheme, price volume influencers were found to have increased the price and volume of the five scrips through manipulative trades, followed by the circulation of buy recommendations through bulk SMSs in the five scrips by the prima facie SMS sender Hanif Shekh, who was prima face the mastermind behind the scheme to lure public investors to buy such shares..
In the last leg of the scheme, off-loader investors sold the shares of these five scrips (previously acquired by them) at elevated prices thereby making substantial profits, which were transferred through multiple layers and conduits to the ultimate beneficiaries of the scheme, who were identified as promoters of some of the companies and Shekh, according to the regulator..
