**Executive Summary:**
This document is a response to Lok Sabha Unstarred Question No. 3961 regarding complaints of pump-and-dump activities. It details the number of complaints received by SEBI, actions taken, investor protection measures, and awareness programs conducted by SEBI and IEPFA. The document also addresses potential amendments to securities laws and transparency measures.
**Key Points / Main Content:**
**Complaints and Regulatory Actions:**
* SEBI received 34, 41, and 25 investor complaints related to suspected pump-and-dump activities in FY 2022-23, FY 2023-24, and FY 2024-25, respectively.
* From April 2020 to March 2025, SEBI levied penalties of INR 1860.03 Crores and directed disgorgement of unlawful gains of INR 452.60 Crores under the PFUTP Regulations, 2003.
**Investor Protection and Education:**
* Disgorged amounts are credited to the Investor Protection and Education Fund, which SEBI may use to restitute identifiable investors who suffered losses from securities law violations, as per the SEBI Investor Protection and Education Fund Regulations, 2009.
* IEPFA conducted over 71,000 investor awareness programs between FY 2019-20 and FY 2024-25, promoting prudent financial practices and cautioning against fraudulent activities.
* SEBI, stock exchanges, and depositories conduct regular investor education and awareness programs covering investing principles, investor rights, and common investment scams.
* SEBI, in collaboration with MIIs, runs a dedicated campaign on Fraud and Scam Prevention in the Securities Market.
* In FY 2024-25, SEBI, along with MIIs, AMFI, and AMC, conducted investor awareness programs in 724 districts across 36 States and Union Territories, covering nearly 32 lakh investors.
* SEBI has launched the Saathi Mobile App, offering educational resources and investment information.
**Regulatory and Surveillance Frameworks:**
* SEBI has regulatory and surveillance frameworks to ensure stable operations and development of securities markets.
* Surveillance systems generate alerts indicating potential insider trading, front running, price-volume manipulation, and other irregularities.
* SEBI conducts investigations based on alerts and investor complaints, taking enforcement action under the SEBI Act, 1992.
* SEBI may impose measures such as debarment, penalties, and disgorgement for violations like pump-and-dump schemes.
**Impact Analysis:**
**SEBI:**
* *Impact:* Responsible for administering regulations, investigating complaints, conducting awareness programs, and taking enforcement actions against pump-and-dump schemes and other fraudulent activities.
* *Action Required:* Continue monitoring and enforcing regulations, conducting investor awareness programs, and taking appropriate action against violators.
**Investors:**
* *Impact:* Affected by pump-and-dump schemes and other fraudulent activities. Benefit from investor education programs and potential restitution from the Investor Protection and Education Fund.
* *Action Required:* Participate in investor education programs, report suspicious activities to SEBI, and seek restitution if losses are suffered due to securities law violations.
**Pump-and-Dump Operators:**
* *Impact:* Subject to investigation, penalties, debarment, and disgorgement of wrongful gains if found guilty of fraudulent activities.
* *Action Required:* Cease all fraudulent activities and comply with securities laws and regulations.
**Market Infrastructure Institutions (MIIs), Association of Mutual Funds in India (AMFI), and Asset Management Companies (AMC):**
* *Impact:* Collaborate with SEBI in conducting investor awareness programs.
* *Action Required:* Continue to support and participate in investor awareness initiatives.
Key Entities Referenced
SEBI: Securities and Exchange Board of India, the regulatory body for securities markets in India.
Investor Education and Protection Fund Authority IEPFA: An authority responsible for investor education and protection.
SEBI Prohibition of Fraudulent and Unfair Trade Practices Relating to Securities Market Regulations, 2003 PFUTP Regulations: Regulations by SEBI to prevent fraudulent and unfair trade practices in the securities market.
SEBI Prohibition of Insider Trading Regulations, 2015 PIT Regulations: Regulations by SEBI to prevent insider trading in the securities market.
SEBI Investor Protection and Education Fund Regulations, 2009: Regulations governing the Investor Protection and Education Fund.
SEBI Act, 1992: The Act of Parliament that established the Securities and Exchange Board of India (SEBI) and provides it with legal authority.
Association of Mutual Funds in India AMFI: An association of all registered mutual funds in India.
Saathi Mobile App: A mobile application launched by SEBI offering educational resources and investment information.
GOVERNMENT OF INDIA
MINISTRY OF FINANCE
DEPARTMENT OF ECONOMIC AFFAIRS
LOK SABHA
UNSTARRED QUESTION NO. 3961
TO BE ANSWERED ON MONDAY, AUGUST 18, 2025/SRAVANA 27, 1947 (SAKA)
COMPLAINTS OF PUMP-AND-DUMP ACTIVITIES
3961. Shri Suresh Kumar Shetkar:
Will the Minister of Finance be pleased to state:
(a) the number of complaints related to suspected pump-and-dump activities received
by SEBI during the last three years and the number of them resulted in regulatory
action or compensation;
(b) the eligibility criteria for retail investors to seek redress/claim compensation in
pump-and dump frauds and whether there is any mechanism to provide interim
relief to affected investors;
(c) the details of the awareness and investor education programmes conducted by the
Government, SEBI and the Investor Education and Protection Fund Authority
(IEPFA) to help investors identify and avoid pump-and-dump schemes;
(d) whether the Government propose any amendments to existing securities laws or
the SEBI Act for stronger enforcement powers against pump-and-dump operators
including swift asset freezes and arrest powers; and
(e) whether the Government commit to publishing annual white paper or report in
Parliament listing all pump-and-dump cases, actions taken and pending
prosecutions to ensure transparency & public accountability?
ANSWER
MINISTER OF STATE FOR FINANCE
(SHRI PANKAJ CHAUDHARY)
Ans(a): SEBI administers SEBI (Prohibition of Fraudulent and Unfair Trade Practices
Relating to Securities Market) Regulations, 2003 (PFUTP Regulations) and SEBI
(Prohibition of Insider Trading) Regulations, 2015 (PIT Regulations), for ensuring
protection of investors’ interest. The number of investor complaints related to
suspected pump-and-dump activities received by SEBI during the last three financial
years is as under:
Year No. of investor complaints received by
SEBI
FY 2022-23 34
FY 2023-24 41
FY 2024-25 25During the period, April 2020 to March 2025, SEBI levied penalty for INR 1860.03
Crores and has passed directions of disgorgement of unlawful gains for INR 452.60
Crores under SEBI (PFUTP) Regulations, 2003.
Ans(b): Under the SEBI (Investor Protection and Education Fund) Regulations, 2009,
disgorged amounts are credited to the Investor Protection and Education Fund, from
which SEBI may restitute funds to identifiable investors who suffered losses from
securities law violations.
Ans(c): SEBI and the Investor Education and Protection Fund Authority (IEPFA),
undertake extensive investor education and awareness initiatives to safeguard
investors’ interests in the securities market.
1. Between FY 2019-20 and FY 2024-25, IEPFA, along with various
organisations, conducted over 71,000 investor awareness programmes
nationwide promoting prudent financial practices such as saving, budgeting,
and investing, while cautioning investors against fraudulent activities.
2. SEBI, in co-ordination with stock exchanges and depositories, also carries out
regular investor education and awareness programs across the country. These
free of cost programs, inter-alia, cover various topics such as basic investing
principles, investor rights and responsibilities, common features of investment
scams such as pump-and-dump schemes, fake trading apps, unregistered
investment advice via social media platforms and other channels, social media
experts giving stock tips, deepfake videos of public figures, paid trading courses
with guaranteed return promises, impersonation of SEBI officials and
intermediaries and unsolicited tips promising unrealistic or guaranteed returns.
3. SEBI in collaboration with Market Infrastructure Institutions (MIIs) runs a
dedicated campaign on ‘Fraud and Scam Prevention in the Securities Market’,
sharing tips to avoid investment scams, healthy digital practices etc. The
campaign is widely disseminated through digital media.
4. In FY 2024-25 SEBI, along with MIIs, Association of Mutual Funds in India
(AMFI) and Asset Management Companies (AMC), conducted investor
awareness programs in 724 districts across 36 States and Union Territories,
covering nearly 32 lakh investors. SEBI has also launched the Saa₹thi Mobile
App, readily offering educational resources and investment information.
Ans (d) and (e): SEBI has put in place regulatory and surveillance frameworks for
effecting stable operations and development of the securities markets. Surveillance
systems generate a variety of alerts indicating possible instances of insider trading,
front running, price-volume manipulation, and other irregularities. Such alerts, along
with investor complaints, serve as inputs for detailed examinations, on the basis of
which SEBI conducts investigations and takes enforcement action under the SEBI Act,
1992. For violations such as pump-and-dump schemes or other fraudulent activities,
SEBI may impose measures including debarment of entities for specified periods, levy
of penalties, and disgorgement of wrongful gains, as provided under the SEBI
Act,1992 and related regulations.
***