SEBI widens crackdown on pump and dump schemes, raids multiple locations

The Securities and Exchange Board of India (SEBI) has intensified its efforts to combat fraudulent trading practices, conducting a series of search operations in various cities throughout June 2025. These raids are part of a broader initiative to halt “pump and dump” schemes, which have increasingly targeted unsuspecting retail investors. By executing these targeted raids, SEBI aims to dismantle fraudulent networks and send a clear message about the consequences of market manipulation. The ongoing investigations underscore SEBI’s commitment to protecting investor interests and maintaining market integrity.

Pump-and-dump schemes typically involve fraudsters artificially inflating a stock’s price through exaggerated claims or false information, luring retail investors to buy at inflated levels. Once the prices peak, the perpetrators sell off their holdings, causing sharp price declines that result in significant losses for latecomers. SEBI’s recent actions highlight the critical importance of investor awareness to avoid schemes designed to exploit market sentiment and manipulate stock prices. Furthermore, these efforts reflect SEBI’s resolve in maintaining a transparent and fair market environment.

In an official statement, SEBI confirmed, “Search and seizure operations were executed at various premises in connection with pump-and-dump activities involving certain stocks, leading to the confiscation of significant evidence. The investigation is currently ongoing.” This statement reflects SEBI’s proactive approach in curbing illicit trading activities and protecting the interests of retail investors. The regulatory body has a history of cracking down on such activities, particularly in the small and medium-sized enterprise (SME) segment, where manipulative practices have thrived on digital platforms.

One prominent case involved Bollywood actor Arshad Warsi and his wife, Maria Goretti, who were among 59 entities implicated in a pump-and-dump scheme linked to Sadhna Broadcast Limited, now rebranded as Crystal Business System Ltd. In May 2025, SEBI banned them from the securities markets and ordered them and other participants to return illicit gains totalling ₹58.01 crore, along with 12% annual interest from the end of the investigation period until repayment.

SEBI’s detailed order identified orchestrators of the manipulation scheme, namely Gaurav Gupta, Rakesh Kumar Gupta, and Manish Mishra. They allegedly crafted and promoted misleading narratives through YouTube videos, falsely claiming that Sadhna Broadcast held a coveted 5G license, was on the verge of an acquisition by the Adani Group, and had secured a lucrative ₹1,100 crore deal with a US-based company. These false narratives were propagated by intermediaries referred to as “information carriers,” who helped create a façade of credibility without directly engaging in trading.

As SEBI continues its vigilant efforts against financial fraud, these developments serve as a reminder of the potential risks in the stock market. The regulator’s actions highlight the need for investors to critically assess information before making investment decisions, especially in an era where digital platforms can rapidly amplify misleading content. This vigilance is crucial in safeguarding the financial ecosystem and ensuring that investors are protected from deceitful practices.