Sebi slaps Rs 24 lakh penalty on Prefer Abasan

Markets regulator Sebi has imposed a penalty of nearly Rs 24 lakh on Prefer Abasan for indulging in manipulative trading practices in the shares of public sector lender Indian Overseas Bank (IOB).
Prefer Abasan Pvt Ltd had indulged in self-trades in the cash market at NSE in the scrip of IOB without intention of change of beneficial ownership but intended to operate in order to make profits in the derivative segment on the expiry dates of Future and Options contracts on October 31, 2013 and November 28, 2013, as per a Sebi order.
Self-trades do not result in change of ownership as the buyer and the seller are the same.

Prefer Abasan had indulged into self-trades for over 17.39 lakh shares forming 53.01 per cent of the market volume traded during the last half an hour on October 31, 2013 while it had executed self-trades for over 10.97 lakh shares forming 54.47 per cent of the market volume traded during the last half an hour on November 28, 2013.
"The noticee (Prefer Abasan) had also indulged in order book manipulation by repeatedly placing and deleting orders by creating false and misleading appearance of trading in the scrip of IOB on October 31, 2013 and November 28, 2013.
"Therefore, I am of the view that on account of such manipulative activities and trading practices, the noticee had violated provisions of... Sebi (Prohibition of Fraudulent and Unfair Trade Practices Relating to Securities Market) Regulations 2003," Sebi adjudicating officer Biju S said in an order dated January 31.

For the violation, the Securities and Exchange Board of India (Sebi) has slapped a penalty of Rs 23.94 lakh on Prefer Abasan, which is equivalent to three times of the amount of profit made by it.