If any person indulges in unfair trade practices relating to securities, the monetary penalty should be imposed under 15HA of SEBI act -THE SECURITIES AND EXCHANGE BOARD OF INDIA
If any person indulges in unfair trade practices relating to securities, the monetary penalty should be imposed under 15HA of SEBI act -THE SECURITIES AND EXCHANGE BOARD OF INDIA
SEBI observed some large-scale trade reversals in the stocks segment and pursuing further investigation it was found that total 2,91,744 trades comprising substantial 81.40% of all the trades were non genuine and these trades lead to creation of artificial volumes. During investigation Kasturi Aich (“Noticee”) was found indulged in execution of reversal trades in stock options segment of BSE. Adjudication proceedings initiated against the noticee for violation of Regulations 3(a), (b), (c), (d), 4(1) and 4(2)(a) of SEBI regulation,2003. The proceeding was conducted by appointed adjudicating officer BARNALI MUKHERJEE in [ADJUDICATION ORDER NO. Order/BM/UR/2021-22/14819]
A show cause notice was issued as to show why penalty should not be imposed under section 15HA of the SEBI Act, 1992 for the alleged violations in the notice it was alleged that Noticee had executed 2 non genuine trades in 1 Stock Options contract which resulted in artificial volume of total 50,000 units. And the investigation was conducted in response of the noticee response.
The proceedings were conducted, and it was found that the Noticee had executed non-genuine trades in stock options contract to total trades in the contract was 6.67% in the aforesaid contract and from the trade log it was found that the trades executed by the Noticee in a contract were squared up within a short span of time and the wide variations in the trades indicates that there was pre-determination in the prices by the counterparties while executing the trades. The authority relied on SEBI vs. Rakhi Trading Private Ltd to consider that the trades were not coincidental but were pre-planned.
From the investigation and from the trading behavior of the noticee confirms that the noticee has violated regulations 3(a), (b), (c), (d), 4(1) and 4(2)(a) of PFUTP Regulations, 2003 and the authority confirmed the imposition of monetary penalty of ₹ 5,00,000/-under the provisions of Section 15 HA of SEBI Act.
Order reviewed by Naveen Sharma