SEBI cases spike as it tightens screws on market scammers and tax defaulters

Since the beginning of the current financial year, 187 cases of market manipulation and price rigging and 34 cases of insider trading have been filed with the Securities and Exchange Board of India (SEBI). According to a report by Hindu BusinessLine, this is more than double the cases filed over the entirety of FY17. The Income Tax Department has been tracking the evasion of short-term taxes by traders who cook their books with fictitious profits and losses. Last year, 76% of the cases were related to manipulation and price rigging as opposed to 63% in 2015-16. The BusinessLine report stated that the rise in numbers is mainly due to the IT Department combing through a series of tip-offs. A SEBI official said that the department has been closely tracking tax evaders through the stock markets post demonetisation. Even the IPO scam by Rupal Panchal and members of her family between 2003 and 2005 did not rope in these many cases. Insider trading happens when someone with access to the company’s sensitive information gives it out to someone else or deals with shares of the company in a manner that is not privy to the public. Rigging or manipulation is artificial price movement in stocks by traders. Investigations taken up by SEBI in the commodity markets too rose by 62% in FY17. In all, the regulator took up 97 cases in the commodity markets for detailed investigation in 2016-17 compared with 61 in 2015-16. A total of 2,328 cases have been filed with SEBI till date, 2,059 of which have been probed by the capital markets regulator already.