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The Economic Times

Sebi fines 4 entities Rs 21 lakh for fraudulent trading in BSE stock options

New Delhi: Markets regulator Sebi has imposed a total fine of Rs 21 lakh on four entities for carrying out fraudulent trades in the illiquid stock options segment on the BSE.

ENPAR Fortune Pvt Ltd, Flyhigh Exports Pvt Ltd and Anuj Katta were fined Rs 5 lakh each, while Arham Share Consultants Pvt Ltd was levied penalty of Rs 6.20 lakh, totalling Rs 21.20 lakh, according to Sebi's separate orders.

Sebi had conducted an investigation between April 2014 and September 2015 into the trading activities of several entities that were suspected to be entering into non-genuine trades in illiquid stock options.

Pursuant to the investigation, Sebi found that the four were among the several entities that executed non-genuine trades by reversing trades with same entities on the same day with wide variations in price without any basis for such wide variation.

"The synchronized trading by the Noticee (four entities) with same counterparty at same time for same quantity at same price and reversal of transaction with wide variation in price of the reversed trades in the same contract in a short time without any basis, all indicate that the trades executed by the Noticee were not genuine trades," Sebi said in separate but similar-worded orders.

By doing so, the four entities contravened the PFUTP (Prohibition of Fraudulent and Unfair Trade Practices) regulations, making them liable for imposition of monetary penalty, the Securities and Exchange Board of India (Sebi) said.
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