Sebi Cracks Down on Artificial Stock Volume: A Comprehensive Penalty Overview

The Securities and Exchange Board of India (Sebi) has imposed Rs 20 lakh in penalties on four entities for non-genuine trading practices in the BSE's illiquid stock options segment. Investigations revealed reversal trades creating artificial volumes, prompting fines to maintain market integrity.

The Securities and Exchange Board of India (Sebi) has taken decisive action against market manipulation by imposing penalties totaling Rs 20 lakh on four entities. The fines, set at Rs 5 lakh each, target those engaged in non-genuine trading within the illiquid stock options segment of the BSE.

These penalties follow Sebi's extensive investigation into suspicious trading patterns observed from April 2014 to September 2015. The investigation highlighted a concerning trend of large-scale reversal of trades, a practice that creates artificial trading volumes and misleads market perception.

Sebi defines reversal trades as instances where an entity reverses its buy or sell positions, leading to a deceptive semblance of activity. By imposing these fines, Sebi reaffirms its commitment to upholding transparency and integrity in the financial markets.

(With inputs from agencies.)