In an ex-parte interim order, SEBI alleged that the two entities used aggressive orders in Sensex constituent stocks to influence the index’s Indicative Equilibrium Price (IEP) and benefit from their expiry-day Sensex options positions.
SEBI’s examination found three sharp moves in the Sensex during the CAS — 362 points in two seconds, 133 points in 12 seconds and 405 points in 28 seconds.
In the case of Copthall, SEBI said the entity placed large buy orders across Sensex constituents at prices around 3% above the reference price. Copthall accounted for as much as 99.91% of the buy-order value during the first spike, 96.09% during the second and 85.21% during another relevant period.
SEBI also noted that Copthall subsequently cancelled buy orders worth around ₹98.12 crore across 30 Sensex stocks.
The regulator alleged that the trades were linked to Copthall’s expiry-day options positions, with a higher Sensex level potentially benefiting its long call and short put positions.
Mansi, meanwhile, allegedly placed aggressive sell orders across eight Sensex constituents, totalling 12.65 lakh shares. Around 7.05 lakh shares were placed at prices 2.5% below the reference price, according to SEBI.
The entire sell block was subsequently cancelled. SEBI alleged that Mansi used the downward pressure on the Sensex to benefit from its expiry-day put option positions.Importantly, SEBI said there was no prima facie evidence that the two entities acted in concert. However, the regulator said both appeared to have independently attempted to create favourable movements in the Sensex.
Wrongful gains and SEBI action
SEBI has pegged the alleged wrongful gains at ₹2.96 crore for Copthall and ₹71.65 lakh for Mansi, taking the combined amount to around ₹3.68 crore.
The regulator has ordered the alleged wrongful gains to be impounded, with the respective amounts to be maintained in fixed deposits carrying a lien in favour of SEBI.
SEBI has also restrained both entities from accessing the securities markets and participating in the Closing Auction Session. The restrictions are interim in nature and will remain in force until further orders.
The action comes as SEBI stresses the importance of maintaining the integrity of the CAS mechanism. The regulator said manipulation of the closing price can affect fair price discovery, F&O settlements and mutual fund NAV calculations, while potentially exposing other market participants, including retail investors, to losses.
