Order Spoofing: SEBI bans 4 directors from trading in the market, illegal earnings of ₹3.22 crore will be confiscated

Market regulator Securities and Exchange Board of India (SEBI) has banned stock broking company Patel Wealth Advisors (PBWAA) and its 4 directors from trading in the market due to involvement in order spoofing fraud. These include Denis Maheshbhai Patel, Mitul Umedlal Vora, Kaushal Vasantrai Patel, and Minish Maheshbhai Patel.

SEBI has also ordered the confiscation of the directors' illegal earnings of Rs 3.22 crore. The company is accused of manipulating the prices of shares by order spoofing in 621 cases. In order spoofing, a trader deliberately places an order, which he cancels before it is settled, while trading on the other side.

Sebi's Whole-Time Member Kamlesh Varshney said in a 41-page order, Patel Wealth Advisors used it to mislead others and profit from fluctuations in market prices. This created chaos in market prices and weakened the market.

Order spoofing is an illegal trading activity in which orders are placed for large-scale purchase or sale of shares. The order is intended to be canceled before execution, while trades are executed simultaneously on the order book's opposite side. Such an order is called the spoof side, and the trader involved in it is known as a spoofer. This practice creates the illusion of false demand or supply in the market, causing price fluctuations and causing losses to unwary investors.