Manipulative trades: Sebi imposes Rs 17 lakh fine on 3 entities

Markets regulator Sebi has imposed a total fine of Rs 17 lakh on three entities for executing fraudulent and manipulative trades in illiquid stock options segment on the BSE.

Abhishek Capital Pvt Ltd, Ajanta Comtrade Pvt Ltd and Ravinder Singh are the three entities facing the penalty, as per Sebi's separate orders.

Sebi imposed a fine of Rs 7 lakh on Ravinder Singh, while Ajanta Comtrade and Abhishek Capital were fined Rs 5 lakh each.

The Securities and Exchange Board of India (Sebi), after observing large-scale reversal of trades in stock options segment of the bourse, conducted an investigation between April 2014 and September 2015.

In April 2018, Sebi announced to take action in a phased manner against 14,720 entities for fraudulent trades in the illiquid stock options segment and has passed several orders in the past few months against such entities.

The probe found that more than 80 per cent of all trades executed in the segment were non-genuine in nature and the three entities were among the various entities that executed such trades by reversing trades with same entities on the same day with wide variation of price.

The trades executed by the three entities were not genuine and created an appearance of artificial trading volumes, Sebi said in separate, but similarly worded orders.

Indulging in such non-genuine trades is violative of PFUTP (Prohibition of Fraudulent and Unfair Trade Practices) regulations which makes them liable for monetary penalty, the regulator said.