Sebi levies Rs 22.9 lakh fine on 3 entities for fraudulent trading

Markets regulator Sebi has imposed a total fine of Rs 22.9 lakh on three entities for indulging in fraudulent trading in the illiquid stock options segment on the BSE.

Of the total fine levied on the entities, Rs 11.9 lakh was levied on Sampoorna Buildwell Pvt Ltd, Rs 6 lakh on Shubhang Exports Ltd and Rs 5 lakh on Chetna Satish Mehta.

The orders follow an investigation conducted by the Securities and Exchange Board of India (Sebi) in the stock options segment of the BSE from April 2014 to September 2015 after it observed large-scale reversal of trades that led to creation of artificial volume.

The probe found that the entities were among those that indulged in execution of non-genuine trades by executing reversal trades in the stock options segment.

Reversal trades are those trades in which an entity reverses its buy or sell positions in a contract with subsequent sell or buy position with the same counterparty during the same day.

"By engaging in such non-genuine transactions, (the) noticee created a misleading impression of trading in respective contracts while dealing in stock options contracts in a fraudulent manner," Sebi said in similarly worded separate orders.

Sebi noted that the firms violated the Prohibition of Fraudulent and Unfair Trade Practices norms.