Title Of The Paper: The Modern Share Rigging: A Comparison Between Regulatory Competence And A Resilient Manipulator
- IJLLR Journal
- Mar 4
- 1 min read
S. Swaminathan, VIT School of Law, Chennai
ABSTRACT
The rise of democratisation in India's capital markets has never been seen before, as the number of retail investors increased from approximately 1.5 crore in 2020 to more than 4 crore in 2024. This wide distribution of ownership provides benefits to the global economic landscape but introduces greater susceptibility for abuse by others in these markets, including share rigging.
Through this paper, we will focus on the anatomy and types of current-day market manipulation. We will cover the range of tactics used including traditional pump-and-dump style operations, advanced circular trading techniques, and algorithmic manipulation of indices; evaluate the many tiers present in the Indian legal system focused on market manipulation; identify the many shortcomings of enforcement authorities; evaluate how increasing levels of fines have not deterred high-frequency traders, complications from cross-border jurisdictional issues, or fraudulent activity on social media; and lastly, assess the impact of these activities on the microstructure of financial markets, the misallocation of capital, and the erosion of retail investor confidence. Based upon all of these factors, our conclusions are that India needs to bring about systemic reform to the way regulatory authorities enforce market manipulation laws within their respective jurisdictions by employing real-time, AI-driven monitoring systems, quicker administrative remedies, and improved coordination with international law enforcement agencies to create an environment that prohibits manipulation, thereby preserving the integrity of India’s capital markets as they continue to evolve into the global financial services marketplace.
Keywords: Share rigging, Securities and Exchange Board of India, Retail Investors, Algorithmic trading, Securities fraud, Capital markets.
