Over 6,700 stock trading fraud cases reported in 5 years, ₹1,083 crore recovered: Govt

Over 6,700 cases of stock trading fraud have been reported across India in the past five years, the Parliament was informed on Tuesday.

In a written reply to the Rajya Sabha, Minister of State for Finance Pankaj Chaudhary provided year-wise data on stock trading frauds violating the SEBI Act, 1992, and related regulations.

The highest number of cases, 2,071, was recorded in 2019-20, followed by 1,763 in 2020-21, 1,813 in 2021-22, 435 in 2022-23, and 635 in 2023-24.

Chaudhary said that SEBI, as the market regulator, has the authority to order individuals who made wrongful gains or averted losses through illegal transactions to disgorge an amount equivalent to such gains or losses.

Between 2019-20 and 2023-24, SEBI issued directions to recover over ₹1,083 crore.

The minister said that SEBI has implemented regulatory and surveillance frameworks to detect and prevent stock trading fraud.

"It conducts regular surveillance of trends in the securities markets to enhance market integrity and safeguard interest of investors," Chaudhary said.

"In order to detect and prevent stock trading frauds, the surveillance mechanism generates alerts on insider trading and price/market manipulation, on the basis of which SEBI conducts further investigation and takes appropriate enforcement action under the powers given by the SEBI Act, 1992,” he added.

In coordination with stock exchanges and depositories, SEBI also conducts regular investor education and awareness programs across the country.

“These free of cost programs, inter-alia, illustrate common features of investment scams, caution against unsolicited investment schemes and unauthorized trade through unregistered intermediaries and create awareness on identification of fake entities/ schemes,” the minister said.