SEBI fines 5 entities ₹34 lakh for fraud trade

PTI New Delhi | Updated on August 28, 2019

Market regulator SEBI has slapped a total fine of ₹34 lakh on five entities for carrying out fraudulent and non-genuine trades in the illiquid stock options segment on the BSE.

Shristi Cement, Sureshine Vintrade, Tejas Babulal Shah, Sai Refinery and Greencrest Financial Services are the five entities facing penalties, according to SEBI’s separate orders.

The regulator had conducted a probe in the trading activity in illiquid stock options on BSE covering April 2014 to September 2015 period, after it observed large-scale reversal of trades in the segment.

The investigation revealed that the five entities were among the various entities that executed non-genuine trades in the stock options segment by reversing trades with same entities on the same day with wide variations in price.

“Reversal trades were undertaken by the noticee with its counterparties with a predetermined arrangement to book profit or losses respectively, and, therefore, the parties to the trades were not trading in the normal sense and ordinary course of business,” SEBI said.

By doing so, the five entities “created artificial volumes in such stock options which was manipulative and deceptive in nature”, the regulator said in separate, but similarly-worded orders.

The act of entities were in violation of PFUTP (Prohibition of Fraudulent and Unfair Trade Practices) norms, thereby making them liable for monetary penalty, the Securities and Exchange Board of India (SEBI) said.

Accordingly, a fine of ₹14 lakh was imposed on Sai Refinery, while the other four entities were fined ₹5 lakh each.

Published on August 28, 2019

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