Sebi levies Rs 3.5 million fine on seven entities over non-genuine trades

Capital markets regulator Sebi on Friday imposed penalities amounting to Rs 35 lakh on seven entities over non-genuine trades in illiquid stock options on BSE.

In seven separate orders, the regulator slapped a fine of Rs 5 lakh each on Vinita Agarwal, Arjun Sahoo HUF, Banwari Lal Arora HUF, Pranita Kayan, Dazy Jain, Manish Kumar Soni and Vinit Kumar Agrawal.

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

The Securities and Exchange Board of India (SEBI) conducted a probe into the trading activity in illiquid stock options on BSE for the period April 2014 to September 2015 after observing large-scale reversal of trades in the stock options segment.

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.