Stock Market regulator SEBI has banned 19 individuals from accessing the securities market and has directed the depositories NSDL and CDSL to freeze their demat accounts until further directions. SEBI has also asked the depositories to square off existing open positions of these entities in the F&O segment. Stock exchanges have been directed to ensure that these entities are not allowed to take fresh positions or increase their open positions or execute trades.

The 19 entities were found to have indulged in circular trading among themselves in 12 scrips across two time horizons (March 1 to September 20, 2009 and July 1 to December 20, 2009). They inflated the traded volumes in these scrips. SEBI found that their contribution to the total volume in these scrips ranged from 23.8 per cent to 67 per cent, whereas the volume of circular trading amongst themselves to total volume was in the range of 14.02 per cent to 56.62 per cent.

Based on the nature and manner of trades executed in the select scrips, SEBI came to a prima facie conclusion that the trades were executed by one Mr Sunil Mehta along with six other associates who opened accounts in the names of the 12 entities and did synchronised trading.

Since the other 12 opened the accounts on their volition for the alleged manipulative purpose SEBI deemed it imperative to prohibit them from accessing the securities market as well.

The persons against whom this order has been passed may file their objections within 21 days, inspect documents on specific request or avail a personal hearing on a mutually convenient date, said SEBI.

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