Mumbai: The Securities and Exchange Board of India (SEBI) on Monday took strict action against stockbroker Patel Wealth Advisors (PWA) and its four directors for their involvement in illegal trading practices.

The market regulator barred them from dealing in the securities market and ordered the recovery of Rs 3.22 crore in illegal gains.

SEBI found that PWA was involved in ‘order spoofing’, a fraudulent method where large buying or selling orders are placed with the intention to cancel them before execution.

Meanwhile, trades are made on the opposite side to take advantage of price movements triggered by those false orders.

In its interim order issued on Monday, SEBI explained that although order spoofing had been spotted earlier on a smaller scale in India, this was the first time such a large and widespread operation was uncovered.

SEBI’s whole-time member Kamlesh Varshney said that PWA’s actions misled other investors and disturbed the fair functioning of the market.

He emphasised that continuing such practices would harm investors’ interests and damage trust in the stock market.

“Order spoofing is a manipulative, fraudulent and unfair trade practice employed by PWA to deceive other market participants and profit from price fluctuation they induced on unwary investors in the market. This practice distorted market prices and undermined market efficiency,” Varshney mentioned.

The investigation showed that PWA’s spoofing activities happened in both the cash and derivatives segments over a period of three years, between January 2021 and January 2025.

According to SEBI’s findings, PWA manipulated 173 stocks across 292 trading days, sometimes multiple times in a single day. In total, they carried out 621 unique spoofing instances.

The manipulation involved placing large fake orders far from the current market price to create a false sense of demand or supply.

Once the prices moved in their favour, PWA quickly executed trades on the opposite side and later canceled the large fake orders, making wrongful profits.

The regulator also highlighted that despite repeated warnings and proceedings from the National Stock Exchange (NSE), PWA continued with unfair trading practices.

SEBI mentioned that it has now developed new techniques to detect such complex manipulations in the market. It also said that a detailed investigation will follow.

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