Sebi slaps Rs 8 lakh fine on 4 individuals for fraudulent trading activities

Markets regulator Sebi on Thursday imposed a total penalty of Rs 8 lakh on four individuals for indulging in the fraudulent trading activities in the shares of Focus Industrial Resources Ltd (FIRL) back in 2013.

Markets regulator Sebi on Thursday imposed a total penalty of Rs 8 lakh on four individuals for indulging in the fraudulent trading activities in the shares of Focus Industrial Resources Ltd (FIRL) back in 2013. A fine of Rs 2 lakh each has been imposed on Savitri Devi Agarwal, B M Agarwal, Deepak Gupta and Mukat Behari.

An investigation was conducted by Sebi in the scrip of FIRL during the period February to July, 2013. It was found that the individuals were connected on the basis of off-market transactions and contributed in creation of artificial volume by receiving shares of FIRL and later selling them.

Further, the individuals had indulged in trades with one leg in off-market and the reverse leg in the market, which had resulted in creation of artificial volume in FIRL shares. This lead to false and misleading appearance of trading in the scrip, Sebi said. Imposing the penalties, the watchdog said that even though the monetary loss to the investors cannot be computed, any manipulation in the volume or price of the stocks caused by vested interest always erodes investor confidence in the market so that investors find themselves at the receiving end of market manipulators.

"By executing manipulative trades, as has been executed by the noticees in the instant matter, the price discovery system itself is affected. It also has an adverse impact on the fairness, integrity and transparency of the stock market," it added. The four individuals are the noticees.