Sebi imposes Rs 55 lakh on 11 entities for indulging in non-genuine trade

Capital markets regulator Sebi on Thursday imposed penalties totalling Rs 55 lakh on 11 entities for indulging in non-genuine trade in the illiquid stock options segment on the BSE.

In eleven separate orders, the regulator levied a fine of Rs 5 lakh each on Shilpa Chhabra, Shreya Kumari, Sharad Shivnarayan Kasat, Shri Krishan Goyal HUF, Shailesh Singh Prem Singh Negi, Shashank Tekriwal, Sheetal Gupta and Shri Ram Commodities.

Raisoni Securities, Welkin Investment Consultants and Shankar Barter Pvt Ltd were also penalised by the markets watchdog.

The order came after markets regulator Sebi observed a large-scale reversal trade in the illiquid stock options segment on BSE, leading to artificial volumes on the exchange.

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

These eleven entities that have been fined on Thursday 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 violated the PFUTP (Prohibition of Fraudulent and Unfair Trade Practices) norms.