SEBI Cracks Down on Non-Genuine Trades with Rs 40 Lakh Penalty

The Securities and Exchange Board of India (SEBI) penalized eight entities a total of Rs 40 lakh for engaging in non-genuine trades in the illiquid stock options segment on the BSE. These actions were in violation of the Prohibition of Fraudulent and Unfair Trade Practices regulations.

Capital markets regulator SEBI has imposed a total penalty of Rs 40 lakh on eight entities for conducting non-genuine trades in the illiquid stock options segment on the BSE. Each entity faces a fine of Rs 5 lakh, highlighting SEBI's aggressive stance against trade malpractices.

The decision, announced in eight separate orders, follows SEBI's investigation into trading activities between April 2014 and September 2015. The probe revealed large-scale reversal trades, where entities reversed their positions in contracts, creating artificial trading volumes and misleading market appearances.

The entities were found to have flouted the Prohibition of Fraudulent and Unfair Trade Practices (PFUTP) norms. In an unrelated order, SEBI suspended Sumit Kumar Waghmare's registration for six months for non-compliance with investment adviser rules, following an inspection of his services provided between April 2020 and March 2021.

(With inputs from agencies.)