SEBI Imposes Penalty of Rs.25 Lakh on Five Entities in an Illiquid Stock Options Case at BSE

Sebi, the capital markets regulator, fined five organisations a total of Rs.25 lakh on Friday for engaging in non-genuine trades in stock options on the BSE. The regulator fined Dhanwantri Suppliers Pvt Ltd, Dayanidhi Mercantile Pvt Ltd, Sanjay Agarwal HUF, Radhika Sarraf, and Ankit Garg HUF Rs.5 lakh apiece in five separate orders.

The directives were issued after Sebi witnessed large-scale reversal trades on the BSE‘s stock options segment, which resulted in the creation of false volume in the segment.

In light of this, the Securities and Exchange Board of India (Sebi) investigated trading activity from April 2014 to September 2015.

According to the study, these businesses were among many others that engaged in the execution of reversal trades in the stock options area.

According to Sebi, the reverse trades are believed to be non-genuine in character because they are completed in the usual course of trading, resulting in a deceptive or misleading appearance of trading in terms of producing artificial volumes.

They breached the prohibitions of PFUTP (Prohibition of Fraudulent and Unfair Trade Practices) regulations by engaging in such trades in stock options, it stated.