SEBI penalizes 4 entities in illegal stock option case

New Delhi: Capital markets regulator SEBI on Monday imposed a total fine of Rs 20 lakh on four entities for indulging in non-genuine trading in illiquid stock options on the BSE.

In four separate orders, the regulator imposed a fine of Rs 5 lakh each on Prerna Traders Pvt Ltd, Manish Garg HUF, Iravati Enterprises LLP and Abhishek Jain HUF.

The order came after SEBI observed massive 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 probed the trading activity from April 2014 to September 2015.

As per the investigation, it was observed that these entities were involved in several others who were involved in the execution of reversal trades in the stock options segment.

SEBI said that reversal trades are considered to be non-genuine in nature as they are executed in the normal course of business which leads to false or misleading appearance or trade in terms of generating artificial volumes.

By indulging in such trades in stock options, he violated the provisions of PFUTP (Prohibition of Fraudulent and Unfair Trade Practices) norms.

In a separate order, the markets regulator has imposed a monetary penalty of Rs 5 lakh on Rajendrakumar Chhotamalji Mehta for indulging in fraudulent trading in shares of Pine Animation Ltd, SEBI said in a notice.

SEBI scrutinized the shares of Pine Animation Limited from March 2013 to January 2015, as the shares of Pine on BSE saw a huge increase in trading volume and price. Mehta violated PFUTP rules.

SEBI, through a separate order, has imposed a fine of Rs 1 lakh on Asha Prakash Shetty for violating insider trading rules in the case of Titan Company Limited.

The regulator noted that Shetty, who was an employee of Titan, failed to comply with the provisions of PIT (Prohibition of Insider Trading) norms by failing to make necessary disclosures regarding four transactions carried out during the course of the employment of the company. Was.

He was required to make disclosures to the firm for each transaction within two business days.

The disclosure requirements were triggered because the trading value of Shetty’s transactions exceeded Rs 10 lakh. However, she failed to do so.

This order has been given after an investigation conducted by the regulator between April 2018 and March 2019.

In a separate order, the markets regulator has imposed a fine of Rs 1 lakh on Nitin Taylor for violating disclosure norms in the case of Varun Beverages Ltd.

He failed to make necessary disclosures relating to the transaction in the shares of Varun Beverages within the stipulated time and thus, violated the Insider Trading Rules.

Sebi said the tailor was an employee of Varun Beverages at the time of violation of the norms.

On five occasions the value of his business exceeded Rs 10 lakh. However, on one occasion, the tailor said that he made a disclosure in June 2017.

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