SEBI v. Nailesh Kumar Ganeshbhai Prajapati and others (circular trades after SMS tips, Ejecta Marketing, 2022)

Judgment entered

✓ Checked against the primary document on October 8, 2026. The library's summary, tags and figures for this record were compared with the regulator's own document by an AI model (Claude) following written instructions, in a single reading of the order; an independent second reading of 60 SEBI records agreed on every field for 56, the four misses being penalty amounts; a later sample of 50 of the SEBI records added on 9 October agreed on every field for 46. No lawyer has reviewed them. A checked record can still contain errors, and checked does not mean endorsed. See how we check records or report a correction.

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A SEBI adjudicating officer fined eight connected traders Rs 5 lakh each, Rs 40 lakh in all, for circular and synchronized trades in Ejecta Marketing shares on the days that buy-recommendation SMS messages circulated in May 2018. The case against three other noticees ended without penalty.

The record

What was ordered

Civil penalty

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Disgorgement

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Prejudgment interest

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Total relief

—

Alleged gain

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Penalty as published

4m INR

A dash means the release did not state a figure we could extract, not that the figure is zero. Penalty and disgorgement are stored separately so aggregates across the library do not double-count the same dollars. This regulator states penalties in INR. The figure is recorded as published and is not converted, so it does not appear in the USD totals or medians used elsewhere on this site.

What is alleged to have happened

The adjudicating officer of the Securities and Exchange Board of India decided the matter on 29 July 2022. The stock was Ejecta Marketing Ltd. SEBI looked at April to June 2018 after seeing a spike in volume, finding that 96 percent of the volume fell on 14 and 15 May 2018, when SMS messages recommending the stock were circulated. There were 11 noticees.

SEBI identified a group of 34 connected entities, of which 25 traded during those two days. They bought about 45.6 percent of the buy volume and sold about 39 percent of the sell volume. SEBI alleged that some of them sold into the demand created by the messages and that the group traded among themselves in circular and synchronized trades to create the appearance of volume and liquidity, in breach of the PFUTP Regulations.

The order finds that eight noticees, including Nailesh Kumar Ganeshbhai Prajapati, Divyaben Hiteshbhai Gangani, Jay Bhavsar and Nikhil Panchal, were connected and rotated shares among themselves by a circuitous route to create artificial demand. It finds Regulations 3 and 4 of the PFUTP Regulations breached. It records that no gain or loss to investors could be quantified, and that there were no investor complaints.

Each of the eight was penalised Rs 5,00,000 under section 15HA of the SEBI Act, Rs 40,00,000 in total, payable in 45 days. The notice against noticees 1, 2 and 3 was disposed of without penalty.

The record does not show who sent the SMS messages, whether anyone appealed, or whether the penalties were paid. The order imposes no market bar and describes no criminal case.

This library tags the matter as matched orders (circular and synchronized trades). The tagging is ours, not the regulator's.

For the regulator's own account of the facts, read the primary document linked above. This page deliberately summarises the structured record rather than reproducing the order.

What technique is this, and how does it work?

This action is tagged with one technique in our taxonomy. The tagging is ours: regulators charge statutory provisions, not technique names, so the mapping is an editorial judgement described in our editorial policy.

• Matched orders — see how it works, what statute it engages, and every other action tagged the same way.

Timeline

1. 2022-07-29 SEBI order

Primary documents

Everything on this page derives from the documents below. Where our summary and the primary document disagree, the primary document is right.

• SEBI order

The linked release is published by the issuing regulator under its own terms. Our summary and narrative above are our own writing.

Related actions

Other actions in the library sharing at least one technique tag with this one.

Record added October 8, 2026. submit a correction.