Sebi levies Rs 3.5 mn penalty on 7 entities for non-genuine trades

Capital markets regulator Sebi on Tuesday levied fines totalling Rs 35 lakh on seven entities for indulging in non-genuine trades in the illiquid stock options segment on BSE.

In seven separate orders, the regulator slapped a fine of Rs 5 lakh each on Pawan Kumar Sarawagi HUF, Subh Laxmi Trading Co, STIC Tradecomm, Starlight Devcon, Devesh Commosale, Devinder Kumar and Kishorechandra Gulabbhai Desai.

The Securities and Exchange Board of India (Sebi) observed large-scale reversal of trades in the illiquid stock options segment of BSE, leading to the creation of artificial volumes on the bourse.

It conducted an investigation into the trading activities of certain entities engaged in the segment on BSE from April 2014 to September 2015.

According to Sebi, these seven entities were among those who indulged in the execution of reversal trades.

The reversal trades are alleged to be non-genuine in nature as they are executed in the normal course of trading, which leads to a false or misleading appearance of trading in terms of generating artificial volumes, the markets watchdog said.

The entities had flouted the provisions of PFUTP (Prohibition of Fraudulent and Unfair Trade Practices).