What remedial measures do you suggest in the above case

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• Business Ethics
• CASE STUDY (20 Marks)
• Share price rigging is rampant during bull
  runs. To see how it happens, lets check the
  modus operandi. The main format which evolved
  during Harshad Mehtas time, involves three
  participants promoters, operator and a broker
  syndicate. There are ancillary participants like
  fake billsellers, and also perhaps unscrupulous
  auditors and officials. The promoter first finds
  an operator or vice versa. The promoter should be
  interested in bumping up the share price, the
  motivation for which could vary from the basic
  offloading his stake at a high price to gullible
  retail investors to the more advanced which
  comprises complex needs like getting better
  validation for a GDR issue or in an M A. it
  works like this the promoters commit to the
  operator not to sell the market while the
  operation is on.

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• He gives about 10 of his stake to the
  operator of companies affiliated to the brokrs
  syndicate. The syndicate normally comprises 610
  brokers, often dispersed in different cities so
  as not to arouse suspicion of SEBI or the stock
  exchange. Their role is to do circular trading
  which works like this say broker A sells to B at
  Rs. 4.5 will sell to C at Rs. 4.65 and so on.
  The trades are designed to generate the
  impression of large liquidity. After taking
  prices to certain level, news flow is created.
  The news is typically about large orders and
  capacity expansion. These days it is often about
  an acquisition or restructuring. Also, financial
  results need to show improvement. This is done by
  buying revenue. There are agents who sell fake
  bills at a certain commission, which could be
  between 0.5 and 10. ET has learnt this market
  tends to boom at the same time as share markets.
  After the price reaches the target, the syndicate
  exits. The gains are split between the promoter,
  operator and syndicate members. In this
  artificially created Bull Run, there is a new
  element people trying to convert black money to
  white.

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• Answer the following question.
•  
• Q1. Discuss the unethical issues in this case.
•  
• Q2. What remedial measures do you suggest in the
  above case?
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