Sebi fines 2 entities Rs 10 lakh for manipulative trade in BSE stock options segment

Markets regulator Sebi has imposed a total penalty of Rs 10 lakh on two entities for carrying out fraudulent trade in the illiquid stock options segment of BSE.

The regulator imposed a fine of Rs 5 lakh each on one K V Ramana Shetty and City Gold Entertainment, as per Sebi's two separate orders.

Securities and Exchange Board of India (Sebi), during an investigation between April 2014 to September 2015, found that 81.38 per cent of all the trades executed in stock options of the exchange were non-genuine.

The two entities were among those that executed trades by reversing their buy or sell positions in a contract with the same counter party during the same day with wide variations in prices, Sebi said.

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

By indulging in such trade practices, the entities have violated provisions of Prohibition of Fraudulent and Unfair Trade Practices (PFUTP), the regulator said.

Accordingly, a penalty of Rs 5 lakh each has been levied on them.

The orders are in line with Sebi's announcement in April 2018 wherein it had decided to take action in a phased manner against 14,720 entities for fraudulent trade in illiquid stock options segment.

Since October last year, the regulator has passed more than 70 orders against such entities.