Sebi slaps Rs 50 lakh fine on 10 entities for indulging in non-genuine trades

New Delhi: Capital markets regulator Sebi on Friday levied penalties totalling Rs 50 lakh on 10 entities for indulging in non-genuine trades in the illiquid stock options segment on the BSE.

Individually, the regulator slapped a fine of Rs 5 lakh each on Sachin Jain HUF, Moti Lal Baid, Ajay Nopani, Diwakar Jha, Bagdevi Suppliers Pvt Ltd, Rita R Thakkar, Kala Suppliers Pvt Ltd, Megha Nibhwani, Sitaram Jayant and Amit Shaw.

The orders came after the Securities and Exchange Board of India (Sebi) observed large-scale reversal of trades in the illiquid stock options segment of BSE leading to creation of artificial volume.

Thereafter, the markets watchdog conducted an investigation into the trading activities of certain entities in illiquid stock options on BSE for the period April 2014 to September 2015.

According to Sebi, reversal trades are the trades in which an entity reverses its buy or sell positions in a contract with subsequent sell or buy positions with the same counterparty.

The reversal trades are alleged to be non-genuine trades as they lack basic trading rationale and allegedly lead to false or misleading appearance of trading leading to generation of artificial volume, the regulator said in the order.

In a separate order on Friday, Sebi cancelled the certificate of registration of Corporate Strategic Allianz Pvt Ltd for flouting merchant banker norms.

The order came after the markets watchdog conducted an inspection of Corporate Strategic Allianz, a Sebi-registered merchant banker, for the period from April 2022 to September 2023.