The Securities and Exchange Board of India (Sebi) imposed a total penalty of Rs 20 lakh from four entities on Thursday for engaging in inauthentic professions in the illiquid stock options segment on the BSE.
Sebi has fined Preview Vinimay Pvt Ltd, Paramjyoti Tradelinks, Siddharth Kalani and Anil Kumar Banka Rs 5 lakh each, after observing reverse trades in stock options on the Bombay Stock Exchange, which led to the creation of artificial volumes.
After observing this, Sebi initiated an investigation into the trading activities of certain entities in the illiquid stock options segment on the BSE, covering the period from April 2014 to September 2015.
These entities were found to have participated in inversion transactions, Sebi said.
The regulator said these transactions are manipulative and deceptive. Accordingly, Sebi initiated legal proceedings against them for violation of the provisions of Regulations 3(a), (b), (c), (d), 4(1) and 4(2)(a) of the ban of Sebi fraud. and Unfair Commercial Practices Regulations (UFTP), 2003.
Sebi confirmed that these four entities had carried out reversal transactions with their counterparties in the stock options segment, finding that these transactions were not genuine and constituted a violation of the PFUTP regulations.
Earlier in the week, Sebi had also fined Amit Kumar Choudhary HUF, Krishna Swarup Shukla and Jeevan Kumar Agarwal in three separate orders for their involvement in inauthentic trading in the options segment of purchase of illiquid stocks on BSE.