Market regulator Securities and Exchange Board of India (SEBI) has imposed 5 lakh each on two entities dealing with illiquid stock options on the Bombay Stock Exchange (BSE).
SEBI said it has largely reversed trades in the stock options segment on the BSE, which has allegedly created artificial volumes in the stock options segment.
After observation, SEBI had examined the trading activity in the same segment for the period April 2014-April 2015.
The two entities are Shruti Bhalotia Beneficiary Trust and Gladiolus Traders Private Limited.
SEBI said that reversal trades are considered to be non-genuine in nature as they are executed in the normal course of business, giving false or misleading appearance of the trade in terms of generating artificial volumes.
By indulging in such trades in stock options, he violated the provisions of PFUTP (Prohibition of Fraudulent and Unfair Trade Practices) norms.
In a separate order, SEBI has imposed a monetary penalty of Rs 2 lakh on Rishi Agarwal for violating insider trading rules in Varun Beverages case.
Agarwal, who was an employee of Varun Beverages at the time of the breach, had traded shares of the company during the investigation period from January 2017 to April 2018 and on three occasions their trading value was exceeded. 10 lakhs.
As per the rules, he had to make the disclosure to the company within two business days. However, he failed to disclose for two trades and made late disclosures for one trade in violation of PIT (Prohibition of Insider Trading) norms.
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