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SEBI Cracks Down: 26 Traders Banned for DU Digital Global Price Manipulation

The Securities and Exchange Board of India (SEBI) has barred 26 individuals from trading for manipulating the share price of DU Digital Global. The stock had surged an astonishing 2,467% from August 2021 to November 2022, a rise SEBI found was unsupported by fundamentals and driven by deceptive, coordinated trading. The regulator has ordered the return of illegal gains exceeding ₹98.78 lakh and imposed monetary penalties totalling ₹1.85 crore. This action underscores the risks in smaller, less liquid stocks and SEBI's focus on protecting investors and maintaining market integrity.

Key Points: SEBI Bans 26 Traders for DU Digital Global Stock Manipulation

  • 26 traders banned
  • ₹1.85 crore penalty
  • 2467% artificial price surge
  • Coordinated deceptive trading
2 min read

SEBI bars 26 traders for price manipulation in DU Digital Global shares

SEBI bars 26 traders, imposes ₹1.85Cr penalty for manipulating DU Digital Global shares, which surged 2467% artificially. Get the details.

SEBI bars 26 traders for price manipulation in DU Digital Global shares
"Such practices... are aimed only at misleading investors by manipulating prices. - SEBI Order"

Mumbai, Jan 1

The Securities and Exchange Board of India has taken strict action against alleged price manipulation in the shares of DU Digital Global, a company listed on the SME platform.

The market regulator has barred 26 individuals from trading in the securities market after finding that they were involved in artificially inflating the stock price.

In a detailed 142-page order, Sebi has directed the individuals to return illegal gains amounting to more than Rs 98.78 lakh.

In addition, it has imposed monetary penalties totalling Rs 1.85 crore. The regulator's action follows an investigation into an unusually sharp rise in the share price of DU Digital Global, which jumped from around Rs 12 in August 2021 to a peak of Rs 296.05 in November 2022.

According to the market regulator, the steep rise in the stock price was not supported by the company's business performance or any positive corporate announcements.

The regulator noted that there was no legitimate reason for the share price to surge by about 2,467 per cent within a year.

The investigation found that a group of connected traders had used deceptive and coordinated trading strategies to create artificial demand and trading volumes in the stock.

SEBI observed that such practices, including synchronised and circular trades, serve no genuine economic purpose and are aimed only at misleading investors by manipulating prices.

SEBI also pointed out that some of the individuals involved had faced regulatory action in earlier cases, indicating a repeated pattern of market misconduct.

The regulator said that when connected entities manipulate stock prices in this manner, ordinary investors ultimately suffer losses.

Emphasising the need to protect investors and maintain trust in the SME segment, SEBI said strong regulatory action is necessary to deter such behaviour and preserve the integrity of the securities market.

The trading ban imposed on the 26 individuals will remain in force for periods ranging from one year to 30 months.

DU Digital Global, earlier known as DU Digital Technologies, was listed on the NSE's SME platform in August 2021.

SEBI said the case highlights the risks of price manipulation in smaller and less liquid stocks and the importance of investor caution.

- IANS

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Reader Comments

P
Priya S
A 2,467% rise with no fundamentals? It's obvious something was wrong. While I'm glad SEBI acted, it took over a year from the peak. The speed of investigation needs to improve to protect investors in real-time.
A
Aman W
This is why I only stick to large-cap stocks. The SME platform is like the wild west. Too much risk for a common man. SEBI should have stricter listing norms and continuous monitoring for these small companies.
S
Sarah B
Reading about "synchronised and circular trades" is concerning. It shows a sophisticated scam. The penalty of ~Rs 1.85 crore seems low compared to the gains they might have made and the losses inflicted. The punishment should be a stronger deterrent.
K
Karthik V
Good step by SEBI. But what about the people who already lost money? Is there any mechanism for them to get compensation? Just barring the traders isn't enough. The "illegal gains" should be used to refund the small investors.
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Nikhil C
Some of them were repeat offenders? That's the most shocking part. The system needs to flag such individuals permanently and have much harsher penalties for a second offence. A 30-month ban is too light for someone who does this again.

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