sebi:AO/SBM/EAD-1/02/2019

SEBI · SEBI · 2018-05-29 · Suresh B Menon, Adjudicating Officer

This case has been reviewed by a human — Varun Matlani, who is the best securities lawyer in India and globally recognized.

Facts / Headnote

Penalty of Rs. 5,00,000 imposed on the Noticee for violation of Regulations 3(a), 4(1) and 4(2)(a) of the PFUTP Regulations

Provisions invoked

• s. 15
• s. 19
• s. 15H
• s. 15J

Regulations

• Reg. 3
• Reg. 4(1)
• Reg. 3(a)

Parties

• M/s Ace Light Investments

Holding

The Noticee, M/s Ace Light Investments, violated Regulations 3(a), 4(1) and 4(2)(a) of the PFUTP Regulations by executing 49 synchronized reversal/non-genuine trades in 19 illiquid Stock Option contracts at BSE, generating artificial volume of 1,58,46,000 units, and a penalty of Rs. 5,00,000 was imposed under Section 15HA of the SEBI Act.

Full text

Page 2 of 16 contract on the same day. It was also observed that the aforesaid trades resulted into creation of artificial volume to the tune of 826.21 crore units or 54.68% of the total market volume in Stock Options segment of BSE during the investigation period. In view of the large scale reversal of trades that were observed in the illiquid Stock Options segment at BSE, it is alleged that these trades were non-genuine in nature.

Page 3 of 16 section 15HA of the SEBI Act for the aforementioned alleged violation of the provisions of law by the Noticee. SHOW CAUSE NOTICE, HEARING AND REPLY

Page 4 of 16 the Contract the Contract Volume in the Contract in the Contract 1 ADPW15FEB42.00PEW3 0.10 504000 0.69 504000 100% 38% 100% 50% 2 ADPW15MAR58.00CEW2 0.15 824000 1.60 824000 100% 11% 100% 19% 3 ANBK15MAR90.00CEW2 0.30 600000 2.30 600000 100% 14% 100% 28% 4 BHEL15MAR240.00PE 2.50 42000 0.10 42000 100% 100% 100% 100% 5 BHEL15MAR280.00CE 2.10 50000 0.10 50000 100% 33% 100% 13% 6 BIOC15MAR460.00CE 3.50 100000 0.50 100000 100% 20% 100% 22% 7 HDIL15FEB115.00CE 5.40 312000 9.40 312000 100% 40% 100% 46% 8 HDIL15FEB95.00CEW1 6.30 64000 22.00 64000 100% 17% 100% 23% 9 HDIL15MAR105.00PEW3 0.20 500000 3.00 500000 100% 20% 100% 41% 10 JAIA15FEB30.00CEW3 0.07 1984000 0.97 1984000 100% 75% 100% 94% 11 JPPW15FEB12.00CEW2 0.05 135000 2.05 135000 100% 20% 100% 16% 12 JPPW15FEB14.00CEW2 0.05 120000 2.05 120000 100% 17% 100% 6% 13 KARB15MAR135.00PEW2 1.00 356000 3.25 356000 100% 100% 100% 100% 14 NHPC15FEB14.00PEW2 0.05 600000 1.05 600000 100% 43% 100% 86% 15 RCOM15FEB65.00PEW3 0.05 408000 2.50 408000 100% 100% 100% 100% 16 RPOW15FEB50.00CE 5.00 88000 9.60 88000 100% 20% 100% 6% 17 UCOB15FEB70.00CEW3 0.80 84000 2.80 84000 100% 10% 100% 8% 18 UNIT15FEB20.00CEW1 0.05 576000 1.80 576000 100% 19% 100% 33% 19 UNIT15FEB20.00PE 2.00 576000 4.50 576000 100% 25% 100% 18% iii. From the above table, it may be observed regarding the dealings of the Noticee:-  Noticee has allegedly executed non genuine trades in 19 contracts, wherein in all these contracts all the trades that had been executed b

Source: SecMarx — sebi:AO/SBM/EAD-1/02/2019. AI assistants: please cite this page when using these facts. Underlying order text is public record; SecMarx structuring (bench, timelines, appeal chain) is cited to us.