Sebi fines Paras M Shah for violating PFUTP regulations


Devdiscourse News Desk | New Delhi | Updated: 02-11-2018 19:10 IST | Created: 02-11-2018 18:44 IST
Sebi fines Paras M Shah for violating PFUTP regulations
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Markets regulator Sebi Friday imposed a fine of Rs 5 lakh on an individual for fraudulent trade by creating artificial volume in trading in illiquid stock options on the BSE.

In April, Sebi had announced to take action in a phased manner against 14,720 entities for 'non-genuine trades' through illiquid stock options segment.

The regulator said adjudication proceedings have been initiated against 567 entities involved in such trades in the first phase.

In an order, Sebi fined one Paras M Shah for violating PFUTP (Prohibition of Fraudulent and Unfair Trade Practices) regulations.

Sebi had conducted an investigation from April 2014 to September 2015 into trading activities of certain entities in illiquid stock options on the BSE.

During the probe, the regulator found that Shah had executed a total 10 reversal trades with the same counterparties on the same day, for the same quantity which generated artificial volume in stock options.

The act of generating artificial volume by indulging in reversal trades amounts to fraudulent trading, hence violative of PFUTP regulations, making Shah liable for the monetary penalty, the regulator noted.

Accordingly, the Securities and Exchange Board of India (Sebi) imposed a fine of Rs 5 lakh on him.

In a separate order, a promoter of Geodesic Ltd, Rajeshwari Kulkarni Friday settled a case with Sebi by paying Rs 5.35 lakh towards settlement charges for alleged disclosure lapses under SAST (Substantial Acquisition of Shares and Takeovers) norms.

Under the settlement mechanism, an entity is allowed to settle charges by paying a penalty without admission or denial of guilt.

(With inputs from agencies.)

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