August 12th 2023.
The capital market regulator, Securities and Exchange Board of India (SEBI), has taken action against seven entities for indulging in non-genuine trades in the illiquid stock options segment on BSE.
SEBI imposed a fine of Rs 5 lakh each on Dilip Kumar Kedia-HUF, Appu Marketing and Manufacturing, Meena Agarwal, City Gold Media Ltd, Competent Finlease, Sanjiv Kumar Agarwal, and Shah Dhaval Surendrabhai-HUF.
The investigation was conducted after the regulator observed large-scale reversal trades in the illiquid stock options segment on BSE, leading to artificial volumes on the exchange.
The investigation covered the trading activities of certain entities engaged in the segment from April 2014 to September 2015.
The seven entities that have been fined were among those who indulged in the execution of reversal trades.
Reversal trades are non-genuine in nature, as they are executed for the purpose of creating artificial volumes which give a false or misleading appearance of trading.
By indulging in these acts, the entities have violated the norms of the Prevention of Fraudulent and Unfair Trade Practices (PFUTP).
In a separate order on Friday, SEBI also imposed a penalty of Rs 20 lakh on five entities for indulging in manipulation of the share prices of AKG Exim Ltd.
The entities are Satsai Finlease, Anm Fincap, Savita Holdings, Raj Kumar Bansal and Ishu Sharma and the fine is to be paid by them jointly and severally.
This action taken by SEBI is a stern warning to those who engage in fraudulent or manipulative practices in the capital markets. It also serves as a reminder to market players to ensure that their trading activities are in compliance with the applicable laws and regulations.
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