Sebi fines 2 entities for fraudulent trade in stock options

Sebi conducted a probe between April 2014 and September 2015 into the trading activities of certain entities in illiquid stock options on the BSE after observing a large-scale reversal of trades.

Published: 11th January 2019 07:51 PM  |   Last Updated: 11th January 2019 07:51 PM   |  A+A-

SEBI

SEBI building (Photo | Reuters)

By PTI

NEW DELHI: Markets regulator Sebi Friday slapped a fine totalling Rs 20 lakh on two entities for executing fraudulent trades, which created artificial volume in the illiquid stock option segment on the BSE.

The regulator conducted a probe between April 2014 and September 2015 into the trading activities of certain entities in illiquid stock options on the BSE after observing a large-scale reversal of trades.

During the investigation, Sebi found that over 81 per cent of all the trades executed in the BSE's stock options segment were non-genuine trades.

The two entities -- Prompt Commodities and Rajesh Kumar Gagrani -- were among the various entities that were indulged in the execution of non-genuine trades in the stock options as they executed reversal of trades with same entities on the same day.

"It is established that the noticee by indulging in reversal trades on the stock exchange platform which are manipulative/ unfair/ fraudulent/ non-genuine, in nature, had created artificial volumes in the contracts. I conclude that the noticee had violated the provisions of. PFUTP Regulations," Sebi said in two similar-worded orders.

By engaging in such trades, these entities violated provisions of the PFUTP (Prohibition of Fraudulent and Unfair Trade Practices) Regulations.

Accordingly, the Securities and Exchange Board of India (Sebi) has levied a fine of Rs 15 lakh on Prompt Commodities and Rs 5 lakh on Rajesh Kumar Gagrani.

In April 2018, Sebi announced to take action in a phased manner against 14,720 entities for fraudulent trades in the illiquid stock options segment and passed several orders in the past few weeks against such entities.

Stay up to date on all the latest Business news with The New Indian Express App. Download now
(Get the news that matters from New Indian Express on WhatsApp. Click this link and hit 'Click to Subscribe'. Follow the instructions after that.)

Comments

Disclaimer : We respect your thoughts and views! But we need to be judicious while moderating your comments. All the comments will be moderated by the newindianexpress.com editorial. Abstain from posting comments that are obscene, defamatory or inflammatory, and do not indulge in personal attacks. Try to avoid outside hyperlinks inside the comment. Help us delete comments that do not follow these guidelines.

The views expressed in comments published on newindianexpress.com are those of the comment writers alone. They do not represent the views or opinions of newindianexpress.com or its staff, nor do they represent the views or opinions of The New Indian Express Group, or any entity of, or affiliated with, The New Indian Express Group. newindianexpress.com reserves the right to take any or all comments down at any time.

flipboard facebook twitter whatsapp