'Little known brokers could be behind market crash'

Some little-known brokers have come under the scanner of market watchdog Sebi for suspected manipulative activities in stocks by spreading rumours about certain listed companies, including a few mid-cap entities whose share prices fell like nine-pins last week.

The regulator is now looking into the possibility of these brokers, whose trading activities have not been material in the past, being used as front entities by some foreign investors, HNI financiers and even company promoters.

According to sources familiar with the matter, Sebi’s preliminary investigations into the last week’s sharp plunge in some mid-cap stocks have thrown forward certain interesting facts and it could be possible that the rumours could have been spread with an aim to beat down the stocks.