Sebi slaps Rs 30 lakh fine on 6 entities in illiquid stock options case

NEW DELHI, (PTI): Capital markets regulator Sebi on Wednesday imposed penalties totaling Rs 30 lakh on six entities for indulging in non-genuine trades in the illiquid stock options segment on BSE.

In six separate orders, the regulator levied a fine of Rs 5 lakh each on Sumita Mandal, Sumit Agarwal, Sumeet Bhatia and Sons HUF, Suman Poddar, Sumita Samanta and Sumeet Nath.

The orders came after Sebi observed large scale reversal trades in the stock options segment of BSE, leading to the creation of artificial volume.

In view of the same, the Securities and Exchange Board of India (Sebi) had conducted an investigation into the trading activity in illiquid stock options from April 2014 to September 2015.

Pursuant to the investigation, it was observed that these entities were among various others which indulged in execution of reversal trades in stock options segment.

The reversal trades are alleged to be non-genuine in nature as they are executed in normal course of trading, which leads to false or misleading appearance of trading in terms of generating artificial volumes, Sebi said.

By indulging in such trades in stock options, they flouted the provisions of PFUTP (Prohibition of Fraudulent and Unfair Trade Practices) regulations, it added. (PTI)