BSE stock options: Sebi slaps Rs 27 lakh fine on 5 entities for manipulative trade

Markets regulator Sebi Thursday imposed a total fine of Rs 27 lakh on five entities for executing manipulative and non-genuine trades in the illiquid stock options segment of the BSE.

The five entities are Shree Rupandham Steel, Gandiv Investment Pvt Ltd, Ginni Vinimay Pvt Ltd, Laxmi Business & Cement Co, and Madhushree Finvest Pvt Ltd, according to Sebi's orders.

Ginni Vinimay has been imposed a fine of Rs 7 lakh, while the rest four entities have been slapped a penalty of Rs 5 lakh each, totalling Rs 27 lakh.

After observing a large-scale reversal of trades in the illiquid stock options, the regulator had conducted a probe from April 2014 to September 2015.

Pursuant to the investigation, Sebi found that a total of 2.91 lakh trades, comprising over 80 per cent of all the trades executed in the stock options segment during the investigation period were non-genuine in nature.

The five entities were among the various entities that indulged in non-genuine trades, the Securities and Exchange Board of India (Sebi) said.

"The noticee had indulged in execution of reversal trades in stock options with same entities on the same day, which are non-genuine in nature and created false or misleading appearance of trading in terms of artificial volumes," the regulator said for five entities in separate but similarly worded orders.

The act of five entities are violative of the PFUTP (Prohibition of Fraudulent and Unfair Trade Practices) regulations, which make them liable for monetary penalty, the regulator said.