Lok Sabha Question No. 3938 (UNSTARRED), answered on 2025-08-18
Subject: Fraudulent  Schemes in the Securities Market
Ministry: FINANCE
Asked by: Shri Vijayakumar Alias Vijay Vasanth

## GOVERNMENT OF INDIA MINISTRY OF FINANCE

## DEPARTMENT OF ECONOMIC AFFAIRS

## LOK SABHA UNSTARRED QUESTION NO. 3938

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

## FRAUDULENT SCHEMES IN THE SECURITIES MARKET

## 3938. SHRI VIJAYKUMAR ALIAS VIJAY VASANTH:

Will the Minister of Finance be pleased to state:

- (a) the measures taken/to be taken by the Government and SEBI to protect small and retail investors from fraudulent pump-and-dump schemes in the securities market;
- (b) the manner in which the Securities and Exchange Board of India (SEBI) plan to ensure that the investigation into the recently reported Rs. 300 crore pump-anddump scam, reportedly affecting over 4,000 investors is done in a time-bound and transparent manner and that all perpetrators, including market manipulators and colluding intermediaries are held accountable;
- (c) the  regulatory  reforms  or  technological  interventions  are  being  proposed  or implemented by the Government to detect and prevent pump-and-dump activities in listed stocks, particularly in the small-cap and micro-cap segments; and
- (d) whether  the  Government  has  data  on  the  number  of  pump-and-dump  cases reported  and  investigated  by  SEBI  during  the  last  five  years,  including  the  total estimated investor losses and penalties or enforcement action taken in this regard?

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

Ans(a) & (c): Securities and Exchange Board of India (SEBI), has put in place regulatory and  surveillance  frameworks  for  effecting  market  stability  and  for  the  protection  of interest of investors in the stock market,

1.  It  conducts regular surveillance of trends in the securities markets to enhance market integrity and safeguard interest of investors. Surveillance systems are put in  place  to  check  the  abnormal  rise  in  the  prices  of  securities  which  are  not aligned with fundamentals of companies.
2.  The alerts generated by SEBI's surveillance mechanism along with complaints alleging  non-compliance  with  Regulations  are  treated  as  inputs  for  market intelligence by SEBI.
3.  Trading  members  have  also  been  mandated  to  disseminate  scrip  specific cautionary messages so as to increase awareness and caution the investors.
4.  SEBI, in co-ordination with stock exchanges and depositories, also carries out regular investor education and awareness programs across different parts of the country. These free of cost programs, inter-alia, cover various topics such as basic investing principles, product features, risks involved, investor rights and responsibilities,  common  features  of  investment  scams,  pump  and  dump schemes, healthy digital practices, etc
5.  SEBI has also taken steps to increase investor protection and market stability with  respect  to  the  risks  and  volatility  associated  with  the  Futures  &  Options (F&O) segment.

Ans (b): In view of market intelligence received with regard to pump and dump in certain scrips, detailed examination by SEBI in this matter is underway.

Ans (d): SEBI administers the SEBI (Prohibition of Insider Trading) Regulations, 2015 (PIT Regulations) and the SEBI (Prohibition of Fraudulent and Unfair Trade Practices relating to Securities Market) Regulations, 2003 (PFUTP Regulations), which includes pump-and-dump schemes, front running etc. The number of pump and dump cases reported during the last five financial years is as given below:

|                                                              | No. of cases reported                                        | No. of cases reported                                        | No. of cases reported                                        | No. of cases reported                                        | No. of cases reported                                        |
|--------------------------------------------------------------|--------------------------------------------------------------|--------------------------------------------------------------|--------------------------------------------------------------|--------------------------------------------------------------|--------------------------------------------------------------|
| Particulars                                                  | FY 2020- 21                                                  | FY 2021- 22                                                  | FY 2022-23                                                   | FY 2023-24                                                   | FY 2024-25                                                   |
| Pump and dump                                                | 43                                                           | 11                                                           | 34                                                           | 41                                                           | 25                                                           |
| Note: The data is based on the number of complaints received | Note: The data is based on the number of complaints received | Note: The data is based on the number of complaints received | Note: The data is based on the number of complaints received | Note: The data is based on the number of complaints received | Note: The data is based on the number of complaints received |

Between April 2020 and March 2025, SEBI, under the SEBI PFUTP Regulations, 2003, levied  penalties  totalling  ₹1,860.03  crore  and  passed  directions  of  disgorgement  of unlawful gains for ₹452.60 crore.

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