SEBI cracks down on stock trading frauds, recovers over Rs 1,083 crore in 5 years

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The Securities and Exchange Board of India (SEBI) has recovered over Rs 1,083 crore through disgorgement orders in the last five years as part of its crackdown on stock trading frauds.

In a written response to Rajya Sabha, Minister of State for Finance Pankaj Chaudhary disclosed that a total of 6,717 cases of stock trading fraud, including insider trading and market manipulation, were recorded between FY 2019-20 and FY 2023-24.

"Over the past five years between FY 2019- 20 to FY 2023-24, SEBI has issued directions to disgorge amounts totalling over Rs. 1083 crores," the response noted.

SEBI has been actively investigating cases of insider trading, market manipulation, and unfair trade practices, taking enforcement actions against violators under the SEBI Act, 1992.

According to the data provided, a total of 2,071 stock trading fraud cases were recorded in the financial year 2019-20. The number saw fluctuations over the years, dropping to 1,763 in 2020-21 and further to 1,813 in 2021-22. However, a significant decline was observed in 2022-23, with just 435 cases reported.

In the most recent fiscal year 2023-24, the number of fraud cases rose again to 635.

The market regulator also claims to have strengthened its surveillance mechanisms to detect and prevent stock trading frauds.

It conducts real-time monitoring of trading patterns, generating alerts for potential cases of insider trading and price or market manipulation. Based on these alerts, SEBI initiates investigations and takes enforcement actions, ensuring that offenders are penalised and investor interests are safeguarded.

Investor protection remains a key focus, with SEBI working in coordination with stock exchanges and depositories to educate retail investors, it mentioned.

"SEBI, in coordination with stock exchanges and depositories, also carries out regular investor education and awareness programs across different parts of the country. These free-of-cost programs, inter alia, illustrate common features of investment scams, caution against unsolicited investment schemes and unauthorized trade through unregistered intermediaries, and create awareness on identification of fake entities/schemes," the response noted.