Manipulative trade: Sebi imposes fine of Rs 12 lakh on 2 entities

Markets regulator Sebi on Monday levied a total fine of over Rs 12 lakh on two entities for executing non-genuine and fraudulent trades in the illiquid stock options segment on the BSE.

The two entities -- Swastik Securities & Finance and Survi Dealers Pvt Ltd -- were fined Rs 7.6 lakh and Rs 5 lakh, respectively, Sebi said in two separate but similar-worded orders.

After observing large-scale reversal of trades in the BSE's stock options segment, the Securities and Exchange Board of India (Sebi) conducted an investigation into the trading activity in illiquid stock options on the exchange from April 2014 to September 2015.

Sebi said total 2.91 lakh trades comprising over 80 per cent of all the trades executed in stock options segment during the investigation period were non-genuine.

The probe found that the two companies were among the various entities that executed non-genuine trades in the stock options segment by reversing trades with same entities on the same day with wide variations in price.

"The Noticee by engaging in such non-genuine transactions, created a misleading impression of trading in respective contracts while dealing in stock options contracts in a fraudulent manner," Sebi said, for both the entities in the orders.

By indulging in such trades, both entities violated the PFUTP (Prohibition of Fraudulent and Unfair Trade Practices) norms, making them liable for monetary penalty, Sebi said.