Sebi slaps Rs 40L fine on 8 entities for indulging in non-genuine trades

Capital markets regulator Sebi has imposed a total fine of Rs 40 lakh on eight entities for indulging in non-genuine trades in the illiquid stock options segment on the BSE.

Sebi levied a fine of Rs 5 lakh each Utkal Automotive Pvt Ltd, Mrinal Verma, Sanjoy Kumar Gupta and Family, Meenu Ajmera, Advent Commosales, Manish Kumar Kanodia HUF, Nisha Pandey, and Viswaroop Marketing, the regulator said in eight separate orders on Wednesday.

The orders came after 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 volume.

 

The orders came after 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 volume.

Thereafter, the markets watchdog conducted an investigation into the trading activities of certain entities in illiquid stock options on BSE for the period April 2014 to September 2015.

Accordingly, these entities are to be fined who indulged in reversal trades, the regulator said in eight separate orders.

According to Sebi, reversal trades are the trades in which an entity reverses its buy or sell positions in a contract with subsequent sell or buy positions with the same counterparty.

The reversal trades are alleged to be non-genuine trades as they lack basic trading rationale and allegedly lead to a false or misleading appearance of trading leading to the generation of artificial volume.

In view of the same, such reversal trades are alleged to be deceptive and manipulative in nature, it said.

On Thursday, Sebi slapped a penalty of Rs 5 lakh each on Mamta Bhiwaniwala, Babulal Ramanlal Shah HUF, Subhas Chandra Agarwala, Accentuate Tradecom Pvt Ltd and Poonam Charan Gupta for indulging in non-genuine trades in the illiquid stock options segment on the BSE.