SEBI Bans Two Firms Over Alleged Closing Price Manipulation

India's Securities and Exchange Board of India (SEBI) has banned two firms from trading in the country, citing manipulation of trades on a newly launched closing-price mechanism. The firms, Copthall Mauritius Investment and Mansi Share and Stock Broking, allegedly manipulated trades on August 13 when weekly derivatives contracts linked to the BSE Sensex expired.

The regulator said aggressive buy orders by Copthall, which is owned by JPMorgan Chase, and large sell orders by Mansi distorted the prices of Sensex constituent stocks. The regulator estimated wrongful gains of about 29.6 million rupees for Copthall and 7.2 million rupees for Mansi.

The closing auction session (CAS) was introduced in India on August 3 to improve price discovery, but has triggered sharp swings in the Nifty 50 and BSE Sensex benchmarks.