NEW DELHI: Markets regulator Sebi has imposed penalties totalling Rs 25 lakh on five entities for indulging in non-genuine trades in illiquid stock options at the BSE.
In five separate orders, the regulator levied a fine of Rs 5 lakh each on Aruna Devi, Sanjay KR Agarwal and Oth HUF, Sanjay Kumar Mehta, Sanjay Bajoria and Surbhi Jalan.
The orders came after Sebi observed large-scale reversal trades in the stock options segment at the BSE, leading to the creation of artificial volume in the segment.
In view of the same, the Securities and Exchange Board of India (Sebi) conducted an investigation into the trading activities of certain entities in illiquid stock options at the BSE for the period between April 2014 and September 2015.
Pursuant to investigation, it was observed that over 2.91 lakh trades comprising substantial 81.38 per cent of all the trades executed in stock options segment of the BSE. It noted that these entities were among various others that indulged in the execution of reversal trades in the stock options segment.
The reversal trades are alleged to be non-genuine in nature as they are executed in the normal course of trading, which leads to a false or misleading appearance of trading in terms of generating artificial volume, Sebi said.
By indulging in such trades in stock options, they flouted the provisions of the PFUTP (Prohibition of Fraudulent and Unfair Trade Practices) norms, it added.
