Sebi slaps Rs 45 lakh penalties on 9 entities for non-genuine trades

Capital market regulator Sebi on Tuesday levied penalties totalling Rs 45 lakh on nine entities for indulging in non-genuine trades in the illiquid stock options segment on BSE.

In nine separate orders, the regulator imposed a fine of Rs 5 lakh each on Vivek Company, Soundlight Projects, S R Realbuild, Srijan Dealers, Manomay Dealmark, Zodiac Vanijya, VKJ Trexim, Hans Homes and Guruteg Bahadur Rice Mill.

The orders came after Sebi observed large-scale reversal trades in the illiquid stock options segment on BSE, leading to artificial volumes on the exchange.

Thereafter, it conducted an investigation into the trading activities of certain entities engaged in the segment from April 2014 to September 2015.

The nine entities fined on Tuesday were among those who indulged in the execution of reversal trades.

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 regulator said.

By indulging in these acts, the entities have violated the PFUTP (Prohibition of Fraudulent and Unfair Trade Practices) norms.

In a separate order on Monday, the regulator disposed of show-cause notices issued against 10 individuals as the allegation of violation of insider trading rules was not established in the Titan Company Ltd (TCL).

The order came after the Securities Appellate Tribunal (SAT) in its ruling on July 12, had set aside Sebi's orders against 10 individuals for violating insider trading norms in the shares of TCL and directed the capital markets watchdog to pass a fresh order.