Sebi levies Rs 15 lakh fine on 3 entities in illiquid stock options case

Capital markets regulator Sebi on Thursday imposed a total of Rs 15 lakh fine on three entities for indulging in non-genuine trades in stock options on BSE.

In three separate orders, the regulator slapped a fine of Rs 5 lakh each on Priti Sultania, Deepa Hirani and Vivek Rungta HUF.

The orders came after Sebi observed large scale reversal trades in the stock options segment of BSE, leading to the creation of artificial volume in the segment.

Consequently, the Securities and Exchange Board of India (Sebi) had conducted an investigation into the trading activity from April 2014 to September 2015.

In the investigation, it was observed that these entities were among the various others that indulged in the execution of reversal trades in the stock options segment.

The reversal trades are alleged to be non-genuine in nature as they are executed in the normal course of trading, which leads to a false or misleading appearance of trading in terms of generating artificial volumes, Sebi said.

By indulging in such trades in stock options, they violated the provisions of PFUTP (Prohibition of Fraudulent and Unfair Trade Practices) norms, it added.

In a separate order, Sebi has slapped a monetary fine of Rs 2 lakh on Raman Goyal for flouting the PFUTP norms in the matter of Octant Interactive Technologies.

In another order, Sebi has levied a penalty of Rs 1 lakh on C Santosh Kumar for violating insider trading rules in the matter of Titan Company Ltd.

Kumar, who was an employee of Titan Company at the time of the violation, had traded shares of the company during the investigation period from April 2018 to March 2019.

Disclosure requirements were triggered because of traded value in excess of Rs 10 lakh as specified under the PIT (Prohibition of Insider Trading) norms.

Being an employee of the company, he was required to make disclosures to Titan for each of the transactions within two business days. However, he failed to make disclosures for three transactions in violation of PIT norms.