In one of the largest cases of its kind in India, SEBI has unearthed a massive spoofing operation run by Patel Wealth Advisors Pvt Ltd, exposing deep vulnerabilities in the securities market and ordering the recovery of ₹3.22 crore in unlawful gains.
A New Scale of Market Manipulation Uncovered
The Securities and Exchange Board of India (SEBI) has exposed one of the most extensive cases of order spoofing in Indian market history, implicating Patel Wealth Advisors Pvt Ltd (PWAPL) and its directors.
In a stringent order issued on April 28, SEBI banned PWAPL from accessing the securities market through its proprietary account and barred its directors from participating in trading activities. The firm and its leadership have been directed to return over ₹3.22 crore in illegal profits derived through fraudulent trading practices.
SEBI’s investigation revealed that PWAPL engaged in spoofing across 173 scrips over 292 scrip-days in some cases manipulating prices multiple times a day — totaling 621 unique spoofing instances.
This operation, unlike earlier isolated spoofing events detected in 2023 (such as the Nimi Enterprises case), was sustained across both the cash and derivatives segments over three years, signaling a far more systemic and deliberate abuse of market mechanisms.
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How the Spoofing Operation Manipulated Market Sentiment
Order spoofing, as detailed by SEBI’s Whole-Time Member Kamlesh Varshney, involves placing large buy or sell orders far away from current market prices with no intention of executing them.
These “phantom” orders create a false sense of demand or supply, influencing genuine investors to adjust their trading strategies based on deceptive market cues.
When these genuine traders react — either by buying into a perceived rally or selling off during apparent selling pressure — the spoofer, in this case PWAPL, executes trades on the opposite side of the order book to profit from the price movement they themselves artificially induced.
Once the targeted price movement is achieved, the fake orders are canceled, leaving other market participants trapped at manipulated prices.
SEBI found that PWAPL’s spoofing practices were not isolated mistakes or rare anomalies but rather a calculated trading strategy executed repeatedly to distort market dynamics for personal gain. The manipulation targeted a wide range of scrips and operated seamlessly across both buy and sell sides, amplifying its impact on market efficiency and investor trust.
Upholding Market Integrity: SEBI’s Swift Enforcement Action
In his strongly worded order, Varshney emphasized the urgent need for an interim ban to prevent further damage to the securities market’s credibility. “Allowing PWAPL to continue its spoofing activities would severely erode market integrity and harm investor interests,” he stated.
He also labeled order spoofing as a manipulative, fraudulent, and unfair trade practice — a direct attack on the core principles of market fairness and transparency. Spoofing undermines price discovery, misleads participants, and distorts true supply-demand dynamics, ultimately harming retail and institutional investors alike.
The PWAPL case serves as a stark reminder that Indian markets, though robust, remain vulnerable to sophisticated manipulation strategies long seen in global markets.