SEBI levies ₹55 lakh fine on 11 entities for non-genuine trades

The logo of the Securities and Exchange Board of India is pictured on the premises of its headquarters in Mumbai, India.
| Photo Credit: Reuters

Securities and Exchange Board of India (SEBI) has levied penalties totalling ₹55 lakh on 11 entities for indulging in non-genuine trades in illiquid stock options segment on the Bombay Stock Exchange (BSE.)

In 11 separate orders, the regulator slapped a fine of ₹5 lakh each on Kamala Agarwal, Kamla Devi Bajoria, Kamla Jain, Kamaljeet Kour, Kamal Ramprasad Gupta, Kamal Kumar, Kamlesh Ahuja, Kailash Narottamdas Anam, Sanjay Kumar Daga HUF Pragma Suppliers Private Limted and Aromatic Tie Up Private Limited.

The orders came after the regulator observed large-scale reversal trades in the illiquid stock options segment on the BSE, leading to artificial volumes on the exchange.

SEBI conducted an investigation into the trading activities of certain entities engaged in the segment from April 2014 to September 2015. “The entities to be fined were among those who indulged in reversal trades,” SEBI said in the 11 separate orders on September 21.

“Reversal trades are non-genuine as they are executed in the normal course of trading, leading to a false or misleading appearance in terms of generating artificial volumes,” the regulator said.

“By indulging in such trades, the entities violated the PFUTP (Prohibition of Fraudulent and Unfair Trade Practices) norms,” it said.

In a separate order on Wednesday, SEBI imposed fines totalling ₹20 lakh on two entities for flouting disclosure rules in the matter of IFL Promoters Limited.

In another order, the regulator suspended the registration of 3M Team Research Private Limited for a period one year for violating the regulatory norms.