JPMorgan Unit Hit by Market Manipulation Allegations in India

JPMorgan's Indian unit is facing allegations of market manipulation from India's Securities and Exchange Board (SEBI). The regulator banned the JPMorgan Mauritius unit from its capital markets in a first-time enforcement action over alleged manipulation of the country's new closing auction for stock prices.

According to people familiar with the matter, the subsidiary plans to seek clarifications but is unlikely to appeal the order for now. This suggests an effort to take a more conciliatory approach towards Indian regulators, who have become increasingly proactive in reforming the market and haven't hesitated in penalizing foreign firms active in its $5.1 trillion stock market.

The unit, Copthall Mauritius Investment Ltd., will seek additional information on an interim order from SEBI when they get a hearing to clarify allegations of market manipulation. The regulator fined both entities 37 million rupees ($386,000) in what it termed were unlawful gains and banned them from accessing the capital market.