Ketan Parekh Scam Of 2001

The stock market scam that took place in 2001 was created by Ketan Parekh. He was referred to as the "One Man Army" or "Pentafour Bull" of the Indian stock market before the scam came to light because the stocks he bought in would soar, and investors would follow his recommendations without question. On some of the stocks he controlled during the scheme, Ketan Parekh even produced a 200% annual return.

Ketan Parekh, a Chartered Accountant by training, began his professional career managing the brokerage business run by his family, NH Securities. Subsequently, he joined his master Harshad Mehta, following in his footsteps. In addition to working as a promoter for one of Harshad Mehta and Ashwin Mehta's businesses, Parekh learned the stock market's tactics and trades from his mentor Harshad Mehta.

Ketan Parekh Early life and Family

Ketan Parekh, who is 60 years old, was born in 1963 into an upper middle class family that included stockbrokers and chartered accountants. He got fascinated by the stock market after watching his father trade stocks.

After earning his CA, he started working for his family's stock brokerage firm before joining Harshad Mehta's enterprise, GrowMore. Mamta Parekh is Ketan Parekh's wife, and they have two daughters together. When she was one and a half months old, one of Ketan Parekh's kids has had postviral encephalitis. It is said that the family relocates frequently so that she might receive treatment in various nations.

What is the Role of Ketan Parekh in scam 1992?

Ketan Parekh played a part in the 1992 swindle, as stated in the sources, although this was not addressed in the web series.

Ketan Parekh was encouraged by the rise of Harshad Mehta and joined his business GrowMore in the early 90s. Ketan Parekh managed to flee when the 1992 scam was discovered, but his involvement in the fraud was revealed in 2001 when his own fraud was discovered.

Ketan was found guilty in 2008 and given a one-year prison term for his involvement in the 1992 fraud. During the 1992 fraud, he was found guilty of stealing public funds of Rs. 48 crore from a Canara Bank branch.

What is Pump and Dump scheme?

The pump and dump plan is a fraud tactic in which con artists first purchase huge quantities of shares before attempting to entice investors to purchase those stocks using false information and a convincing front.

Many investors fall into the trap of buying shares after being misled by false information, which increases demand for those shares and, ultimately, raises share prices. It results in the pumping of share.

After a share pump, investors who purchased that stock lose a significant amount of money as a result of the operators' decision to dump or sell it in order to increase profits.

This is how the pump and dump scheme works, and it's how Ketan Parekh bought enough shares of a few stocks—commonly referred to as K-10 stocks—to manipulate them for large profits.

How Ketan Parekh Pump and Dump K-10 stocks?

Ketan Parekh made enormous gains using the same pump-and-dump methodology, but he also modified it to work with his approach. He made the decision to go after institutional investors since they make significant stock market investments and are simpler to manage than ordinary investors.

Particularly during the Dot-Com boom of 1999–2000, Ketan Parekh was bullish on the Information, Communication, and Entertainment (ICE) industry. The majority of his predictions came true, and as a result, the value of the companies he bought in this industry surged.

Ketan Parekh even delivered 200% yearly returns on some of the companies he controlled thanks to the correct predictions he made that persuaded institutional investors to join the trend. These companies included Pentamedia Graphics, HFCL, GTL, Silverline Technologies, Ranbaxy, Zee Telefilms, Global Trust Bank, DSQ Software, Aftek Infosys, and SSI. These stocks were together referred to as "K-10 stocks."