SEBI slaps over Rs 27 lakh fine on 5 entities for fraudulent trade in stock options

Jahangirabad Finance Co Pvt Ltd, Renesola India Pvt Ltd, Rakesh Garg, Rattan Ispat Pvt Ltd and Ritman Commodities are the entities facing action.

Published: 14th March 2019 07:19 PM  |   Last Updated: 14th March 2019 07:19 PM   |  A+A-

SEBI

For representational purposes (File | Reuters)

By PTI

NEW DELHI: Markets regulator SEBI has levied a total penalty of over Rs 27 lakh on five entities for fraudulent and manipulative trading in illiquid stock options on BSE. Jahangirabad Finance Co Pvt Ltd, Renesola India Pvt Ltd, Rakesh Garg, Rattan Ispat Pvt Ltd and Ritman Commodities are the entities facing action, as per separate orders by the regulator.

SEBI conducted an investigation into the trading activity in illiquid stock options on BSE from April 2014 to September 2015 after observing a large-scale reversal of trades in the bourse's stock options segment.

The regulator observed that the entities placed buy and sell orders in a synchronised manner within seconds of each other and reversed the trades within a short time with wide variation in prices of the trades.

The entities generated trading volumes without any change of beneficial ownership, thereby creating an appearance of artificial trading, Securities and Exchange Board of India (SEBI) said. Such trades executed by the entities were non-genuine in nature, the regulator said.

By indulging in such trades, the entities violated PFUTP (Prohibition of Fraudulent and Unfair Trade Practices) regulations, SEBI said.

Accordingly, a fine of Rs 5 lakh each was imposed on Rattan Ispat, Ritman Commodities and Jahangirabad Finance, while a penalty of Rs 6 lakh and Rs 6.5 lakh were levied on Rakesh Garg and Renesola India, respectively.

The orders are in line with Sebi's announcement in April 2018 to take action in a phased manner against 14,720 entities for fraudulent trade in the illiquid stock options segment. Since October, the regulator has passed more than 60 orders 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