SEBI Slaps 25 Lakhs Penalty on 5 Entities For Non-Genuine Trades

May 19, 2023
SEBI lAW Insider

LI Network

Published on: 19 May 2023 at 16:47 IST

The Securities and Exchange Board of India (SEBI) has imposed penalties amounting to a total of ₹25 lakh on five entities for engaging in non-genuine trades in the illiquid stock options segment on the Bombay Stock Exchange (BSE).

The entities facing penalties include Chitrabai Vasantrao Nikam, Damayanti Jhunjhunwala, Nemichand Kasturchand Jain, Naresh Kumar Agarwal, and Chandra Lakshmi Safety Glass Ltd (CLSG), with each entity being fined ₹5 lakh.

SEBI’s investigation revealed instances of large-scale reversal trades in the illiquid stock options segment on the BSE, resulting in artificial volumes on the exchange. The investigation focused on the trading activities of certain entities involved in this segment between April 2014 and September 2015.

The Securities and Exchange Board of India (SEBI) has imposed penalties totaling ₹25 lakh on five entities for engaging in non-genuine trades in the illiquid stock options segment on the Bombay Stock Exchange (BSE). The entities fined include Chitrabai Vasantrao Nikam, Damayanti Jhunjhunwala, Nemichand Kasturchand Jain, Naresh Kumar Agarwal, and Chandra Lakshmi Safety Glass Ltd (CLSG), with each entity being fined ₹5 lakh.

SEBI’s investigation revealed instances of large-scale reversal trades in the illiquid stock options segment on the BSE, resulting in artificial volumes on the exchange. The five entities that were fined were found to have engaged in such non-genuine trades.

Reversal trades are considered non-genuine as they create a false or misleading appearance of trading by executing trades in the normal course, leading to artificial volumes. SEBI stated that these acts violated the Prohibition of Fraudulent and Unfair Trade Practices (PFUTP) norms.

In a separate order, SEBI has also barred Uday Intellicall Pvt Ltd and its directors from the securities market for six months due to their unauthorized provision of investment advisory services.

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