Be alert to fake trades, NSE warns brokers

The National Stock Exchange (NSE) has asked stock brokers to remain alert saying it has recently unearthed many instances of fake transactions — mainly synchronised trading and creating artificial volumes in particular counters. The exchange today said many trades were being conducted in disregard of the market price.

“It has been observed in a few instances that client/set of clients were executing matched trades, wherein one client/set of clients trading through a particular trading member would incur losses and the counter-party client trading through another trading member would earn a profit. However, in most cases, one or both legs of transactions were away from the current market price,” said the exchange.

According to sources, taking advantage of the bull market, manipulators have started building fake volumes in some illiquid counters to push up prices. Non-genuine trades have mainly occurred in the futures and options (F&O) segment of the equity market.