IIFL Wealth settles SEBI probe in Alkem Lab block deal rigging case

8 Jul 2022

Brokerage IIFL Wealth Management Ltd settled an ongoing probe against it by the Securities and Exchange Board of India for alleged price rigging by paying a settlement amount of 31.3 mln rupees.

Price rigging amounts to a breach of SEBI’s norms on prohibition of fraudulent and unfair trade practices norms.

SEBI’s settlement order today said that IIFL Wealth, along with another brokerage firm of the IIFL Group, IIFL Securities Ltd, allegedly manipulated the reference price considered for execution of block deals in shares of Alkem Laboratories Ltd during Apr-Sep 2019.

In February, IIFL Securities had settled this case by paying a settlement amount of 22.19 mln rupees.

The two brokerage firms were alleged to have manipulated the volume weighted average price of Alkem Lab shares in the cash market in order to meet a commitment given to both seller and buyer in the block deal.

Block deals are permitted to take place at a reference price that is determined by the volume weighted average price of a particular time period during a trading day.

The acts of the two brokers were alleged to be malpractices and in breach of SEBI's anti-fraud norms and stock broker regulations.