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Capital markets regulator Securities and Exchange Board of India (SEBI) has passed strict interim orders on two big institutions—foreign portfolio investor Copthall Mauritius Investment Ltd and domestic brokerage firm Mansi Share and Stock Broking Pvt Ltd—to crack down on stock market manipulation and unfair trading activities.
SEBI has barred both the entities from the securities market and barred their participation in the Closing Auction Session (CAS). Along with this, the regulator has ordered to impound total wrongful gains of ₹3.67 crore earned by both the entities from derivatives positions.
This action is the first formal case of manipulation under the new Closing Auction Session (CAS) mechanism that came into effect from August 3, 2026.
What happened on 13th August? 3 big price spikes were seen in Sensex
The weekly options expiry of BSE Sensex was on 13th August 2026. According to the new rules, the final closing price and Indicative Equilibrium Price (IEP) of the index were to be decided through the Closing Auction Session (CAS) between 3:20 pm and 3:30 pm.
SEBI’s surveillance team found that unusual and sharp price spikes were recorded in the Sensex within a few seconds during the auction:
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First spike: Between 3:20:41 pm to 3:20:43 pm only Sensex 362.02 points in 2 seconds Jumped from 77,661.40 to 78,023.42.
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Second spike: Between 3:24:08 and 3:24:20 pm Index 132.67 points in 12 seconds Climbed.
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Third spike: Between 3:25:49 pm to 3:26:17 pm only 405.08 points in 28 seconds There was a huge jump.
How did Copthall and Mansi create the game of ‘order and cancellation’?
According to SEBI’s investigation order, both the companies placed highly aggressive orders in the cash market auction to profit from their respective options trades without meeting each other:
1. Copthall Mauritius Strategy (Aggressive Buy Orders)
Copthall Mauritius placed limit buy orders in all 30 Sensex stocks at about 3% above the reference price:
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Out of total buy orders worth ₹66.64 crore during the first spike 99.91% (₹66.58 crore) The stake belonged to Copthall alone.
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The company’s share in the second spike was 96.09% and in the third spike it was 85.21%.
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Copthall suddenly canceled buy orders (32.79% shares) worth about ₹98.12 crore after pulling the index higher.
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Objective: The company had huge ‘Long Call’ and ‘Short Put’ positions on the expiry day, which directly benefited from Sensex closing above. SEBI has banned its illegal profits ₹2.96 crore Has estimated.
2. Mansi Broking Strategy (Aggressive Sell Orders and Pressure)
Mansi Share & Stock Broking placed huge sell orders of about 12.65 lakh shares in 8 leading Sensex stocks at rates 2.5% below the reference price.
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Due to these huge sell orders, artificial downward pressure (Price Suppression) remained on the Sensex price for about 5 minutes.
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After this, the company canceled all these sell orders together, due to which the index suddenly jumped by 232.96 points.
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Objective: Mansi had open positions in ‘Put Options’ on the expiry day. The company squared-off its put options at a higher premium, pushing the index down. According to SEBI Mansi did this in this manner ₹71.64 lakh Earned unfair profit.
What strict action did SEBI take?
Taking strict action, the market regulator has ordered:
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Copthall Mauritius and Mansi Share Broking (Proprietorship Account) have been debarred from the capital market with immediate effect.
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Both the institutions have been barred from placing any kind of order in the Closing Auction Session (CAS).
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Both the units have been directed to deposit the total illegally earned amount of ₹3.67 crore in fixed deposits with a lien in favor of SEBI.
What effect does this have on the market and investors?
The final settlement of all futures and options (F&O) deals, NAV of mutual funds and portfolio valuation is determined based on the closing price determined by the Closing Auction Session (CAS). In such a situation, common retail traders have to suffer huge losses by manipulating the index by placing large orders in the last 10 minutes and then canceling them.
This prompt and stringent action by SEBI has sent a clear message that any kind of algorithmic or aggressive manipulation will not be tolerated in the new trading mechanism.