SEBI imposes over Rs 64 lakh fine on 8 entities for fraudulent trading

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Markets regulator Sebi has levied a total fine of Rs 64.40 lakh on eight entities for indulging in unfair trade practices in the illiquid stock options segment on the BSE. GKS Technology Park Pvt Ltd, Femina Stock Management, Sagar Constructions, SPFL Securities Ltd, Leelaben Sureshchandra Kachadiaunder, Laxmi Rolling & Strips Pvt Ltd, Mahakaleshwar Mines & Metals Pvt Ltd and South Delhi Promotors Ltd are the entities facing penalty.

Sebi had initiated adjudication proceedings between April 2014 and September 2015 after observing large scale reversal of trades by various entities in the stock options segment of the BSE.

Investigation revealed that the eight entities were among the various entities involved in reversal of buy and sell positions by the clients and counterparties in a contract.

The reversal trades of the entities involved squaring off open positions with a significant difference without any basis for such change in the contract price which led to generation of artificial volumes, Sebi noted.

“The trading behaviour of the Noticee confirms that such trades were not normal and wide variation in prices of the trades in the same contract in a short time without any basis for such wide variation, all indicate that the trades executed by the Noticee were not genuine trades,” Sebi said in eight separate, but similarly worded orders.

The acts of the entities are in violation of provisions of Prohibition of Fraudulent and Unfair Trading Practices (PFUTP) regulations, Sebi said.
Accordingly, the entities have been fined in the range of Rs 5 lakh to Rs 15 lakh each.

SOURCE-ET NOW NEWS