SEBI levies Rs 20 lakh on 4 entities in illiquid stock options case at BSE

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In four separate orders, the regulator levied a fine of Rs 5 lakh each on Sanjay Mangal, Ashu Garg, Mandeep Singh and Krishna Ojha.

Capital markets regulator SEBI on Tuesday imposed penalties totalling Rs 20 lakh on four entities for indulging in non-genuine trades in illiquid stock options on BSE.

In four separate orders, the regulator levied a fine of Rs 5 lakh each on Sanjay Mangal, Ashu Garg, Mandeep Singh and Krishna Ojha.

The orders came after SEBI observed large scale reversal trades in the stock options segment of BSE, leading to creation of artificial volumes.

In view of the same, the Securities and Exchange Board of India (SEBI) had conducted an investigation into the trading activities of certain entities engaged in illiquid stock options on BSE from April 2014 to September 2015.

Pursuant to the investigation, it was observed that over 2.91 lakh trades comprising a substantial 81.40 per cent of all trades were executed in the stock options segment of BSE.

It noted that these entities were among the various others that indulged in execution of reversal trades in the stock options segment.

The reversal trades are alleged to be non-genuine in nature as they are executed in the normal course of trading, which leads to a false or misleading appearance of trading in terms of generating artificial volumes, SEBI said.

By indulging in such trades in stock options, they flouted the provisions of PFUTP (Prohibition of Fraudulent and Unfair Trade Practices) norms, it added.

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