JPMorgan Unit Regains Trading Rights After Depositing Alleged Unlawful Gains

India's market regulator has lifted a trading ban on Copthall Mauritius Investment Ltd., a JPMorgan unit, after it deposited 29.6 million rupees ($311,230) into a bank account to comply with an order. The deposit was related to alleged unlawful gains from trades in the closing auction session on the BSE on August 13. Both Copthall and Mansi Share and Stock Broking were accused by the Securities and Exchange Board of India (SEBI) of market manipulation in an August interim order.

The regulator had ordered both entities to hand over the gains after its investigation found that they executed manipulative trades during the end-of-day auction to influence the indicative equilibrium price of the BSE Sensex Index, benefiting their options positions on the benchmark. The new auction-based system has been met with wild swings in derivatives tied to stocks.

The regulator will now release a confirmatory order after studying the formal responses of both Copthall and Mansi Share to its allegations. Each company will be given an in-person hearing as part of the investigation.