JPMorgan Unit Accused of Manipulating India's Closing Auction Mechanism

JPMorgan's Indian unit is facing scrutiny from India's market regulator after being accused of manipulating the country's closing auction mechanism. The Securities and Exchange Board of India (SEBI) alleges that Copthall Mauritius Investment Ltd., a JPMorgan Chase subsidiary, and Mumbai-based brokerage Mansi Share and Stock Broking Ltd. carried out trades on August 13 that influenced the indicative equilibrium price of the BSE Sensex.

According to SEBI's interim order, the entities allegedly benefited from their positions in Sensex options through these transactions. As a result, SEBI imposed a combined penalty of ₹3.7 crore (approximately $470,000 USD), describing this amount as unlawful gains.

The regulator also restricted both entities from participating in India's capital markets until the alleged unlawful gains are returned. Copthall is expected to seek further clarification from SEBI during its hearing and may ask for additional information about the allegations.