SEBI Cracks Down on Non-Genuine Stock Trades

SEBI imposed penalties totaling Rs 35 lakh on seven entities for non-genuine trades in BSE's illiquid stock options, creating artificial volume. Additional penalties were levied on a research analyst and an advisory firm for violating market norms, following inspections and investigations by the regulator.

Sebi, the capital markets regulator, has levied a total of Rs 35 lakh in penalties against seven entities accused of executing non-genuine trades within BSE's illiquid stock options segment. Each entity was fined Rs 5 lakh for allegedly engaging in these wrongful trading activities, which created artificial trading volume.

According to Sebi, the entities involved manipulated trades by executing reversal trades—a dubious tactic where purchase and sale positions are reversed with the same counterparty, potentially misleading the market. Sebi's investigation spanned from April 2014 to September 2015, confirming that these trades lacked legitimate trading rationale.

In separate actions, Sebi fined Nikhil Dayanand Baljekar Rs 10 lakh and imposed a Rs 4 lakh penalty on Basant Maheshwari Wealth Advisers LLP. These penalties arose from violations of market norms related to investor promises and regulatory compliance, discovered during Sebi's inspections.

(With inputs from agencies.)