Patel Wealth Advisors Private Limited (PWA), a brokerage firm and his colleague, have been banned by SEBI from taking prices in the market to give big orders at a much lower price than the market price, so that it can be incorrectly shown that a large number of shares have been purchased in the stock market and the company has been fined. An order has also been issued to deposit illegal earnings of Rs 3.22 crore.
Such irregularities in the language of the stock market are called spuofing. The order of SEBI issued on 28 April explained in detail how the investigating officials caught the irregularities. This fraud scam is prevalent in global markets, but this is the first case of such a scam on such a large scale in India. Earlier in 2023, a partner company named Nimi Enterprises was caught doing such irregularities in the Indian stock market, but it was on a very small scale and was cheated in the cash segment for only eight months by this company. However, in the case of Patel Wealth Advisors, both cash and derivative sections were cheated and from January 2021 to January 2025, a total of 173 shares were fraudulent 621 times in a total of four years.
What is spoofing? ,
First of all, a large number of orders are given to buy shares of a company at a much lower price than the market price, to make a perception that a large number of shares have been purchased. In view of such demand, other investors run to buy these shares. When there is such a crowd, the fraudster sells shares at a high price and earns profit. The orders given by the spoofer are not executed and canceled. Similarly, spupping is also done by ordering to sell shares.
