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The Economic Times

Sebi slaps Rs 30 lakh fine on two firms for fraudulent trading

New Delhi: Markets regulator Sebi has imposed Rs 30 lakh fine on two entities - Citrus Securities Pvt Ltd and Suruchi Foods Pvt Ltd - for carrying out fraudulent trades in illiquid stock options segment of the BSE.

Of the total penalty on the firms, Rs 25 lakh fine was imposed on Suruchi Foods, while Rs 5 lakh penalty was levied on Citrus Securities.

Securities and Exchange Board of India (Sebi) conducted an investigation between April 2014 and September 2015 in the stock options segment of the bourse, and noted that majority of volume generated in the segment was artificial volume created by execution of reversal trades.

The two firms were among the various entities that executed reversal trades by reversing trades with same entities on the same day with wide variation of price, Sebi noted.

"... act of Noticee was deceitful and misleading to other unsuspecting investors, and amounts to manipulation of volume in these contracts," Sebi said in similarly worded separate orders.

By indulging in execution of non-genuine trades, the firms created a misleading impression of trading in stock option contracts in a fraudulent manner and thereby violated provisions of PFUTP (Prohibition of Fraudulent and Unfair Trade Practices) Regulations.
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