Sebi imposes Rs 42 lakh fine on 5 entities for non-genuine trades

Markets regulator Sebi has imposed a total fine of Rs 42 lakh on five entities for executing non-genuine trades in the illiquid stock options segment of BSE. As per Sebi's orders, a fine of Rs 14 lakh was levied on Evergrowing Iron & Finvest, while Zealous Financial Services and Vijay Shree Builders Pvt Ltd were imposed a penalty of Rs 9 lakh each. A fine of Rs 5 lakh each was also levied on Amit Auto Credit Company and Ganpati Multi Commodity Business India.

The five entities "indulged in execution of reversal of trades in stock options segment of BSE with same entities on the same day. Such trades are non-genuine in nature and have created false and misleading appearance of trading in terms of artificial volumes in the stock options segment of BSE," Sebi said in similarly worded, but separate orders.

After observing large-scale reversal of trades in the The five entities "indulged in execution of reversal of trades in stock options segment of BSE with same entities on the same day. illiquid stock options, the regulator had conducted a probe into trading activity in the segment during April 2014 to September 2015 period.


Following the probe, Sebi observed that a total of 2.91 lakh trades, comprising over 80 per cent of all the trades executed in stock options segment during the investigation period, were non-genuine.

The five entities were among the various entities that indulged in non-genuine trades, the Securities and Exchange Board of India (Sebi) said.

By indulging in non-genuine trades, the entities violated PFUTP (Prohibition of Fraudulent and Unfair Trade Practices) regulations, the regulator said while imposing fine on them.

In a separate order, Sebi imposed a penalty of Rs 5 lakh on AC Agarwal Share Brokers for utilising the funds of its clients for purposes other than those permitted.

"The Noticee, by utilizing the funds of its clients for purposes other than those permitted, has violated the provisions of the 1993 circular, and thus, is liable to a penalty" Sebi said.