SEBI has initiated a probe into the alleged leak on May 31 of a list of stocks ahead of their being placed under Additional Surveillance Measures (ASM). The regulator ordered the probe following reports that the list was leaked and players have sold stocks before the official communication was made public.
It is suspected that operators in Mumbai and Gujarat may have had access to the list ahead of its official release on May 31 and that they used the information to profit from it by short-selling the stocks on the list.
“It has been reported in a section of the press that a list of stocks, which were to be subjected to Additional Surveillance Measures, was leaked prior to its announcement by stock exchanges on May 31. SEBI has taken note of the same and has ordered an inquiry into the matter,” a release issued by SEBI said.
The share price of more than a dozen stocks, including top-traded group ‘A’ counters, which were part of the list, fell sharply before it was announced they were being put in the ASM category. The list of 109 stocks was put up on exchange websites only after the close of market hours on May 31.
Later, as Sebi put ASM on about 109 stocks there was panic selling in midcap stocks fearing additional curbs from the regulator. According to sources, Sebi has sought trade data from exchanges related to these stocks to identify the players behind the trades. Sebi put these stocks in ASM following huge sell off in these stocks mostly in the mid and small cap categories. The mid cap stocks have been hitting new lows over the past few weeks mainly due to heavy selling by foreign players.