Sebi slaps Rs 15 lakh fine on 3 entities for fraudulent trade activities

Markets regulator Sebi has imposed a penalty of Rs 15 lakh on three entities for executing fraudulent trades in illiquid stock options segment of BSE.

The three entities facing the action are: UB Ventures Pvt Ltd, Pumarth Commodities Ltd and Pumarth Credit & Capital Ltd, according to Sebi orders.

After finding large number of reversal trades in the stock options segment, Sebi conducted a probe from April 2014 to September 2015 regarding the trading activities of certain entities.

During the examination period, the regulator observed that the three entities bought and sold options contract with same counter parties and also reversed trades in less than a minute at substantial price difference.

The trades executed by the entities were ''non-genuine'' in nature and created false appearance of trading thereby leading to artificial volume in stock options segment, the regulator said in three separate orders.

The non-genuine and deceptive transactions of these entities were "fraudulent" under the Prohibition of Fraudulent and Unfair Trade Practices (PFUTP) provisions and the entities needs to be penalised for such acts, Sebi noted in the orders.

Accordingly, the Securities and Exchange Board of India (Sebi) imposed a fine of Rs 5 lakh each on three entities.

In a separate order, Sebi fined an individual Rs 6 lakh for indulging in fraudulent trades in the shares in Pressman Advertising Ltd.

The regulator said that Radha Rani along with group of 28 other entities, created artificial volume in the scrip of Pressman through reversal trades and thereby violated the PFUTP norms.