SEBI’s Investigations: 2023-24 Marks Record Year for Market Probes

• Sai Krishna Muthyanolla

TL; DR: Between 2013-14 and 2023-24, SEBI took up 1,667 cases for investigation, completing 1,603, including backlogs. Over three-fourths of these involved market manipulation or insider trading, with 2023-24 seeing the highest spike at 342 cases. These figures highlight SEBI’s active role in deterring malpractice and ensuring transparency in financial markets.

Context:
Recently, the Securities and Exchange Board of India (SEBI) gave a clean chit to the Adani Group in a detailed order, after months of scrutiny in the Hindenburg case, which involved allegations of manipulative or unfair trade practices. Over the years, SEBI has investigated several major companies, drawing both praise and criticism for its handling of such cases. From market manipulation to insider trading, its probes have frequently made headlines. In this article, we take a closer look at the numbers behind SEBI’s investigations over the years.

Who compiles this data?
The data on the number of investigations taken up by SEBI, including their nature and status, is compiled by the regulator in its annual publication, the Handbook of Statistics. This data offers valuable insights into the scale of SEBI’s enforcement actions over the years.

Where can I download clean & structured data related to SEBI investigations?
Clean, structured, and ready-to-use datasets on SEBI investigations are available for download on Dataful. This dataset provides details on the nature of investigations taken up by SEBI and the number of cases that have been completed over the years.

Key Insights:

• SEBI’s Investigative activity peaks in 2023-24: Between 2013-14 and 2023-24, SEBI took up a total of 1,667 cases for investigation and completed probes in 1,603 of them, including pending ones. Interestingly, 2023-24 saw the highest number of investigations in over a decade, with 342 cases, followed by 245 in 2016-17.

• Three-Quarters of SEBI probes target Market Manipulation and Insider Trading: SEBI conducts investigations for various reasons, including market manipulation and price rigging, issue-related manipulation, insider trading, takeovers, and other violations. Notably, cases related to market manipulation and price rigging alone make up nearly half of all investigations. When combined with insider trading cases, they account for over three-fourths of the total investigations taken up by SEBI.

Why does it matter?
These numbers matter because they reflect the integrity of India’s financial markets, which are crucial for investor confidence and economic growth. High volumes of investigations signal that SEBI is actively monitoring and regulating market activities, deterring malpractice and ensuring transparency.

Key numbers:

• Investigations taken up and closed during the year:
  2013-14: 108 cases taken up and 180 Closed
  2018-19: 194 cases taken up and 110 Closed
  2023-24: 342 cases taken up and 197 closed.
  
• Nature of cases taken up (in % out of total):
  2013-14: Market manipulation and price rigging (62%), Insider Trading (12%), Issue related manipulation (6%), Takeovers (6%), and Miscellaneous (15%).
  2018-19: Market manipulation and price rigging (43%), Insider Trading (36%), Issue related manipulation (1%), Takeovers (3%), and Miscellaneous (16%).
  2023-24: Market manipulation and price rigging (47%), Insider Trading (51%), and Miscellaneous (2%).