Sebi Bans 28 Entities For Fraudulent Trade With Fake SMSes

Market regulator Securities and Exchange Board of India (Sebi) has banned 28 entities from the capital market in case of sending out fake SMSes in bulk with misleading ‘buy’ recommendations to pump up trading volumes in the shares of Kalpa Commercial Company.

Unknown entities sent SMS of the guaranteed return

The order comes after Sebi received complaints from intermediaries alleging that some unknown entities are sending guaranteed return SMSes, thereby misguiding the investors with unauthenticated SMSes.

SEBI found in the complaint’s investigation that 28 connected entities (group) had employed a scheme for offloading a large number of shares of KCL in a manipulative manner.

The shares were sold by the participants of the group either directly or through a layer of off market transfers, Sebi (Securities and Exchange Board of India) noted. These SMSes were sent to Over 3.42 crore investors.

SEBI has imposed a penalty of Rs 35 lakh on three companies.

Besides, the regulator is of the view that a detailed investigation of the entire scheme employed in this case is necessary to determine the detailed role of named entities and any other entity therein, detailed connection amongst the concerned entities and fund trails, among others.



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