SEBI Slams Two Firms for Manipulating New Closing Auction, Freezes ₹3.67 Crore Gains

In a landmark move, India's market watchdog, SEBI, has banned Copthall Mauritius Investment and Mansi Share & Stock Broking from the securities market, freezing alleged wrongful gains of ₹3.67 crore. This decisive action, the first of its kind, comes after the two entities were found prima facie manipulating the newly introduced Closing Auction Session (CAS) on the BSE Sensex weekly expiry day, August 13, 2026. The manipulation scheme saw Copthall Mauritius Investment, a unit of JPMorgan Chase & Co., placing large buy orders to artificially inflate the Sensex's Indicative Equilibrium Price (IEP), while Mansi Share & Stock Broking aggressively placed sell orders to suppress it, with both entities subsequently cancelling these orders. This coordinated effort caused three significant spikes in the Sensex's IEP within mere seconds during the critical closing window, directly benefiting their pre-existing derivatives positions that would have otherwise expired worthless. The CAS mechanism itself, launched just on August 3, 2026, aims to improve price discovery for F&O stocks by gathering all buy and sell orders into a single auction. SEBI Chairman Tuhin Kanta Pandey had publicly warned of strict, immediate action against any CAS manipulation just hours before this order was issued, emphasizing the regulator's enhanced detection capabilities in the new system. Both firms have been instructed to appear before SEBI officials within 21 days as the investigation continues, signaling a firm regulatory stance against practices that could undermine market integrity. This move sets a strong precedent for the fair operation of India's evolving financial markets.