SEBI slaps ₹3.7 crore penalty on two firms for manipulating Sensex closing session

The Securities and Exchange Board of India (SEBI) has issued an interim order against two investment and brokerage firms for manipulating the Closing Auction Session (CAS) of the SENSEX on August 13, 2026, the expiry day. The regulator has imposed a total penalty of ₹3.7 crore on Copthall Mauritius Investment Limited and Mansi Share and Stock Broking Private Limited.

The action came just hours after SEBI Chairman Tuhin Kanta Pandey warned that strict consequences would follow for those attempting to manipulate the CAS. The closing auction session is a mechanism introduced to determine the closing price of securities based on supply and demand. It is designed to reduce volatility and manipulation at the end of trading, as all orders are matched at a single price.

According to the ex-parte interim order passed by SEBI Whole Time Member Kamlesh Varshney, Copthall placed large buy orders constituting at least 85% of all buy orders minutes before the SENSEX closed. These orders were placed at prices exceeding the maximum permissible deviation of 3% from the average price. Copthall then cancelled its latest buy order, which led to three spikes in the index.

Mansi Share and Stock Broking, on the other hand, placed large sell orders across eight SENSEX entities, totalling about 12.65 lakh shares. More than seven lakh shares were offered at a price 2.5% below the reference price, and about 4.6 lakh shares were placed at a discount of more than 1%. These sell orders were cancelled within four to five seconds, the order noted.

“Copthall pushed the IEP (Indicative Equilibrium Price) of SENSEX higher by placing aggressive buy orders at +3%. They also contributed to 85% of the gross buy value. Mansi pushed the IEP of SENSEX lower for a certain time period of ~4 to 5 minutes by placing sell orders at prices much lower than the reference price, and this downward pressure was released when they cancelled their sell orders. The two participants adopted opposite but highly aggressive price-impacting strategies during the same CAS session,” the order said.

SEBI's preliminary findings state that these large buy and sell orders, which were subsequently cancelled, allowed the entities to avoid losses or wrongfully profit from derivative positions that would otherwise have expired worthless. The regulator noted that such manipulative activity undermines the integrity of the closing price discovery process, which is critical for investors who use it as a benchmark for portfolio valuation and derivatives settlement.

As an interim measure, SEBI has impounded about ₹3 crore from Copthall and over ₹71 lakh from Mansi, the latter limited to its proprietary trading. Both entities are barred from trading in the CAS in the equity segment, directly or indirectly. Their bank accounts have been frozen, except for the purpose of depositing the penalty into a stipulated fixed deposit. No debits can be made in their demat accounts without SEBI's approval.

The firms have been directed to provide an inventory of all their assets and to close any open positions within three months of receiving the order. They have been given 21 days to respond to the interim order. The final order will be passed after considering their responses.

This action underscores SEBI's commitment to ensuring fair and transparent markets, particularly during the closing auction session, which has become a target for manipulative strategies. The regulator has been increasingly using surveillance tools to detect such patterns and has vowed to take strict action against any market participant found violating norms.