Lok Sabha Question No. 3984 (UNSTARRED), answered on 2025-08-18
Subject: Market Manipulation Cases
Ministry: FINANCE
Asked by: Shri Manickam Tagore B

## GOVERNMENT OF INDIA MINISTRY OF FINANCE DEPARTMENT OF ECONOMIC AFFAIRS

## LOK SABHA UNSTARRED QUESTION NO. 3984

TO BE ANSWERED ON MONDAY, AUGUST 18, 2025/SRAVANA 27, 1947 (SAKA)

## MARKET MANIPULATION CASES

## 3984. Shri Manickam Tagore B:

Will the Minister of Finance be pleased to state:

- (a) whether the Government is considering setting up a specialised task force or fast-track mechanism within SEBI to detect, investigate and prosecute market manipulation cases such as pump-and-dump schemes more effectively;
- (b) the risk mitigation protocols or early-warning systems are in place within SEBI to detect unusual price-volume movements in illiquid stocks or small-cap stocks that may signal pump and-dump activity;
- (c) the steps taken by SEBI to regulate the role of social media, paid influencers and online trading groups, who mislead investors and amplify pump-and-dump schemes;
- (d) whether the Government proposes to enhance surveillance over unregulated financial advisors and telegram groups misleading retail investors; and
- (e) whether SEBI has mandated higher disclosure norms and investor risk warnings for companies listed on SME exchanges and those with low liquidity?

## ANSWER MINISTER OF STATE FOR FINANCE (SHRI PANKAJ CHAUDHARY)

Ans(a) and (b): Securities and Exchange Board of India (SEBI) has put in place regulatory and surveillance  frameworks  for  effecting  stable  operations  and  development  of  the  securities markets.

It conducts continuous surveillance across asset classes, market segments, and stock exchanges using in-house systems to monitor trends, detect unusual price/volume movements and identify abnormal price rises that are not aligned with the fundamentals of the company. These systems generate a variety of alerts indicating possible instances of insider trading, front running, pricevolume manipulation, and other irregularities.  Such  alerts,  along  with  investor  complaints, serve as inputs for detailed examinations, on the basis of which SEBI conducts investigations and takes enforcement action under the SEBI Act, 1992.

Ans(c) and (d): SEBI has taken various steps to reduce the risk arising out of advices given by unregistered finfluencers on social media through posts and videos that are violative of SEBI Regulations  by  escalating  unlawful  securities-related  content  to  social  media  platforms  for takedown, publishing whitelisted  broker  app  lists  on  stock  exchanges'  website,  and  use  of Application Programming Interface (API) to ensure only SEBI registered intermediaries can advertise  on  social  media  platforms.  It  regularly  coordinates  with  government  agencies  to detect  and  counter  emerging  frauds,  and  has  directed  exchanges  to  bar  trading  members, regulated  persons,  and  their  agents  from  associating  with  entities  offering  unauthorised investment advice or return claims.

Ans  (e):  SEBI  has  provided  a  dedicated  framework  under  the  SEBI  (Issue  of  Capital  and Disclosure Requirements) Regulations to enable SMEs to raise funds through SME platforms of stock exchanges. In March 2025, SEBI amended these regulations to further strengthen SME listings,  introducing  measures such  as revised minimum application size, promoter holding lock-in, applicability of  Related Party  Transaction norms, and mandatory appointment of a monitoring agency which collectively reduce avenues for manipulation in the SME segment.

Additionally, trading members are mandated to display scrip-specific cautionary messages, such as ongoing surveillance actions, non-compliance with listing norms, or high price-toearnings ratios, on trading terminals at the time of order entry, to raise awareness and caution investors.

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