Sebi levies Rs 20 lakh fine on 4 entities in illiquid stock options case

Capital markets regulator Sebi on Monday imposed Rs 20 lakh fine on four entities for indulging in non-genuine trades in stock options on BSE.

In four separate orders, the regulator slapped a fine of Rs 5 lakh each on Sanjay Kumar Khetan HUF, Sanjay Dhody, Princi Agarwal and Priti Sagar Rawat.

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 view of the same, the Securities and Exchange Board of India (Sebi) had conducted an investigation into the trading activity in illiquid stock options from April 2014 to September 2015.

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

The reversal trades are alleged to be non-genuine in nature as they are executed in normal course of trading, which leads to 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) regulations, it added.