BSE stock options: Sebi levies Rs 20 lakh fine on 4 entities

Capital markets regulator Sebi has imposed a total fine of Rs 20 lakh on four entities for indulging in fraudulent trade in illiquid stock options segment of the BSE.

The regulator slapped a penalty of Rs 5 lakh each on Meenakshi Bright Steel Bars Pvt Ltd, Ocean International, Atul Singal and Geo Fresh Organic through separate orders for violating Prohibition of Fraudulent and Unfair Trade Practices norms.

The orders follow a probe conducted by Sebi between April 2014 and September 2015 in the BSE's illiquid stock options segment after observing large-scale reversal of trades.

Investigation revealed that over 81 per cent of all the trades executed in the segment were non genuine trades.

The trades executed by the four entities involved reversal of buy and sell positions, which created artificial volumes.

"...the scheme, plan, device and artifice employed by the Noticee in this case of executing reversal trades in illiquid stock options contracts at irrational, unrealistic and unreasonable prices, tantamount to fraud on the securities market in as much as it involves non-genuine/manipulative transactions in securities and misuse of the securities market," Sebi said in similarly worded separate orders.