Sebi bars Patel Wealth Advisors, 4 directors over 'order spoofing' charges

The stock broker placed large orders without intention to execute them, leading to manipulation in prices, illegal

The Securities and Exchange Board of India (Sebi) on Monday debarred stock broker Patel Wealth Advisors (PWA) and its four directors from dealing in the securities market for alleged order spoofing.

 

Order spoofing is an illegal practice where one places a bid with the intent to cancel the order before execution and simultaneously executes trades on the opposite side.

 

In an ex-parte interim order, the regulator has also directed to impound ₹3.22 crore illegal gains made by them. Sebi will be undertaking a detailed investigation in the matter.

 

“Order spoofing is a manipulative, fraudulent and unfair trade practice employed by PWA to deceive other market participants and profit from price fluctuation they induced on unwary investors in the market. This practice distorted market prices and undermined market efficiency,” noted Sebi whole-time member Kamlesh Varshney in the 41-page order. 

 

The market regulator’s findings show that PWA was involved in extensive spoofing activity in both cash and derivatives segments across 173 scrips between January 2021 and January 2025. Their activity resulted in 621 unique spoofing instances.

 

Sebi’s findings show that PWA placed multiple large orders in various scrips at prices significantly lower or above the prevailing market price without the intention of executing these trades. Such pending orders created a false impression of increased demand or supply in the scrips, thus misleading the investors and affecting the price, Sebi noted.

 

Within a short timeframe, PWA made contra transactions and earned wrongful gains. Later, the pending large order was cancelled.

 

The Sebi order notes that the company continued to indulge in unfair trade practices despite repeated show-cause notice and initial proceedings by the National Stock Exchange (NSE).

 

The order adds that Sebi has developed capabilities to identify such complex and extensive order book manipulations.