Sebi slaps Rs 40 lakh fine on 8 entities in illiquid stock options case
Capital markets regulator Sebi has imposed penalties totaling Rs 40 lakh on eight entities, including individuals, for indulging in non-genuine trades in illiquid stock options at BSE.
In eight separate orders, the regulator levied a fine of Rs 5 lakh each on Nikita Rungta, Aakash Prakash Shah, Abha Mohunta, Aachman Vanijya, Abhi Portfolio, A-C Agarwal Commodities, Vinay Ramanlal Shah HUF, and Vinodkumar M Jain.
The Securities and Exchange Board of India (Sebi) observed a large-scale reversal of trades in the stock options segment of BSE.
It noted that such a large-scale reversal of trades in stock options lead to the creation of artificial volume at BSE.
Because of the same, the regulator conducted an investigation into the trading activities of certain entities in illiquid stock options at BSE for the period April 2014 to September 2015.
According to the investigation, it was observed that over 2.91 lakh trades comprising a substantial 81.38 percent of all the trades executed in the stock options segment of BSE during the investigation period were nongenuine trades.
The non-genuine trades resulted in the creation of artificial volume to the tune of 826.21 crore units or 54.68 percent of the total market volume in the stock options segment of BSE.
It was observed that these eight entities were among the various entities which indulged in the execution of reversal trades in the stock options segment of BSE.
According to Sebi, these entities were instrumental in the creation of artificial volume in the illiquid stock option contracts at BSE during the investigation period by executing reversal or non-genuine transactions in the illiquid stock options segment at the exchange.
By indulging in such trades, they violated the provisions of PFUTP (Prohibition of Fraudulent and Unfair Trade Practices) norms, Sebi said in orders passed on Tuesday.
(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)