Latest news with #PFUTPRegulations
Mint
04-07-2025
- Business
- Mint
SEBI Jane Street scandal: How retail investors can protect themselves
The Securities and Exchange Board of India (SEBI) has recently cracked down on Jane Street, a US based trading giant. The crackdown is to do with alleged manipulation of Indian financial markets and profiting unfairly. The total profit garnered as per the SEBI report is of ₹ 36,502 crore. SEBI's interim order against Jane Street clearly reveals how expiry day trades can be engineered to distort and create complexities in index movements. This case highlights the very serious hidden risks retail investors face in the rapidly evolving, fast moving algorithm driven equity markets. Source: Sebi order link: (Page 10 of the SEBI order) The SEBI order charges Jan Street Group with the manipulation of equity indices. This has been done under SEBI Act Sections 11(1), 11(4), 11B(1), 11(D) and PFUTP Regulations. PFUTP stands for Prohibition of Fraudulent and Unfair Trade Practices. These provisions are discussed in order. Hence, as the case continues to unfold, here are five key takeaways for retail investors: 1. Big players can influence the market — Stay informed: Jane Street's alleged 'pump and dump' tactics on expiry days showcase how easily large trades distort market levels. Retail investors and traders must take note of this fact that indices may not always show a clear reflection of genuine market sentiment, even more so during high volatility periods such as derivatives expiry. 2. Don't blindly follow index movements: SEBI noted that Jane Street's actions gave a misleading and false sense of bullishness in Nifty50 and Bank Nifty. This highlights the need for retail investors to avoid impulsive trades based on sudden index fluctuations and instead use technical indicators or volume data to carefully check and validate trends. 3. Understand how expiry day manipulation works: The alleged rigging involved large scale strategic buying and selling to move index levels on expiry days, thus influencing option prices. That is why if you trade options be extremely cautious around expiry. Sudden moves may not be driven by fundamental market strength but by large institutional strategies. 4. Watch for SEBI advisories and warnings: Earlier SEBI had already warned Jane Street in February 2025. As a prudent retail investor in this case you should always keep an eye on such regulatory red flags. SEBI's website, circulars, notices, along with financial news can all cumulatively offer early warning signs about irregular market behaviour or risk in the equity markets. That is why consistent monitoring, reading and building knowledge is the best way to keep yourself safe in such an environment. 5. Regulators do act — But vigilance is key: This case highlights SEBI's increasing scrutiny of foreign entities along with the complex strategies deployed by them to make money in the Indian equity market. Given regulators act in sincere public interest, the onus is on investors to stay cautious, avoid FOMO i.e.,the fear of missing out, keep themselves away from greedy F&O trades and prioritise risk management to successfully navigate the complexities of the equity markets. Hence, the Jane Street case is a strong wake-up call for retail investors in the country who are busy with emotion based short term trading. Do keep this fact in mind, that in today's data-driven markets, knowledge, patience, and discipline matter more than chasing quick profits. Disclaimer: The views expressed in this article are for informational purposes only and do not constitute financial or investment advice. Readers are advised to consult with a certified financial advisor before making any investment decisions.
Mint
24-06-2025
- Business
- Mint
Think twice before acting on TV stock tips: How front running cheats retail investors
Televised stock market advice along with viral telegram tips often lure innocent retail investors searching for quick equity market gains. Still, a darker concept of 'front running' has led to major enforcements by SEBI along with several strict actions to stop the plundering of retail investor money. The regulator has recently barred analysts, anchors, brokers, market participants and fund dealers for abusing their influence to rake in huge profits ahead of recommendations. Front running simply involves trading on advance, non-public information. This information can contain details about client orders or public stock tips to gain an unfair advantage of the common retail investors. Front running results in undermining market integrity and misleads investors. Furthermore, it is punishable under Regulations 3 and 4 of Prohibition of Fraudulent and Unfair Trade Practices i.e., PFUTP Regulations (2003) and Section 15HA of the SEBI Act, 1992. Now penalties under this legal provision include fines of up to ₹ 25 crores or three times the profits made along with trading bans and time based restrictions. Sanjiv Bhasin – IIFL stock tip scam (June 2025) Bhasin along with 11 others traded through affiliated entities, before publicly recommending stocks on leading media platforms such as Zee Business, CNBC Awaaz and Telegram. SEBI impounded him with ₹ 11.37 crore. The entire scam was carried out by using WhatsApp, phone, and trade records. Zee Business guest analysts – Kiran Jadhav & others (Feb 2024) Several experts tipped stocks after connected traders already bought in, making ₹ 7.5 crore in unlawful gains. SEBI froze assets and issued bans under PFUTP. This was another shocking case of cheating innocent retail investors and luring them into trades based on tips. Hemant Ghai – CNBC Awaaz anchor (Jan 2021) SEBI barred CNBC Awaaz anchor Hemant Ghai and his family for front-running. This scam involved buying stocks ahead of his on-air recommendations. They earned ₹ 6.1 crore illegally. This marked SEBI's first action against a TV anchor for such misconduct. Axis Mutual Fund case – Viresh Joshi & associates (Sept 2021–Mar 2022) SEBI barred Axis MF's ex-chief dealer Viresh Joshi and 20 others for front-running fund trades between Sept 2021 and Mar 2022. ₹ 30 crore in illegal gains was impounded, with accounts frozen and action taken under PFUTP regulations. IDBI Capital – Dedhia & Savla (May 2024) In this particular case, SEBI barred IDBI Capital's Gaurav Dedhia and his sister Kajal Savla for front-running client trades using internal deal information. A total of ₹ 1.67 crore was recovered, and both were fined for violating market integrity under PFUTP regulations. Now given the Axis Mutual Fund and IDBI Capital cases involve institutional front running i.e., a kind of practice where machinery of institutions was used to make unlawful gains. On the other hand, the cases related to Bhasin, Jadhav and Ghai are nothing but media linked manipulative front running. According to SEBI both are fraudulent market practices under the PFUTP and are explicitly classified as illegal offences. Therefore, taking into consideration the above cases carefully, you can stay safe from front running scams by following these simple steps diligently: Be wary of lucrative and buzzy stock tips on both television or Telegram. Check and confirm if the tipster is a registered investment adviser (check SEBI registry). Carefully cross check any sudden price jumps post recommendation. Depend only on independent research or verified brokerage reports. Report suspicious stock trades or timing inconsistencies to SEBI. Hence, by consistently reading, understanding facts and building knowledge of equity markets along with taking guidance from investment professionals you can keep yourself safe from front running scams. Disclaimer: This article is for informational purposes only and does not constitute investment, legal, or financial advice. All references to cases are based on publicly available SEBI records. Readers are encouraged to verify facts independently and consult a SEBI-registered investment adviser before acting on any stock recommendations.
