Capital markets regulator Sebi on Thursday slapped penalties totalling Rs 20 lakh on four entities for indulging in non-genuine trades in the illiquid stock options segment on BSE. The regulator imposed a fine of Rs 5 lakh each on Niruben Manojbhai Chudasama, Raj Kumar Lohiya, Nufact Merchandise Pvt Ltd and Nitu Agarwal.
Sebi had observed large-scale reversal trades in the illiquid stock options segment on BSE, leading to artificial volumes on the exchange. The regulator conducted an investigation into the trading activities of certain entities engaged in the segment from April 2014 to September 2015. The four entities that have been fined on Thursday were among those who indulged in the execution of reversal trades.
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, the regulator said. By indulging in these acts, the entities violated the PFUTP (Prohibition of Fraudulent and Unfair Trade Practices) norms.
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