SEBI imposed on Monday 20 lakh fine on four entities for indulging in non-genuine trades in BSE stock options. Market regulator fined 5 lakh each in four separate orders to Sanjay Kumar Khaitan HUF, Sanjay Dhodi, Prinsi Agarwal and Preeti Sagar Rawat.
SEBI witnessed massive reversal trades in the stock options segment of BSE, leading to creation of artificial volumes. Then came the orders.
In view of the same, the Securities and Exchange Board of India (SEBI) had examined trading activity in illiquid stock options from April 2014 to September 2015.
As per the investigation, it was observed that these entities were involved in several others who were involved in the execution of reversal trades in the stock options segment.
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 volume.
By indulging in such trades in stock options, he violated the provisions of the PFUTP (Prohibition of Fraudulent and Unfair Trade Practices) Rules.
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