sebi:EAD-1/AO/SBM/JR/2021-2022/11853
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Facts / Headnote
Penalty of Rs. 6,00,000 imposed on the Noticee for violating 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
- 4A Financials Securities Limited
Holding
The Noticee, 4A Financials Securities Limited, violated Regulations 3(a), 4(1) and 4(2)(a) of the PFUTP Regulations by executing 46 non-genuine reversal trades in 6 illiquid Stock Option contracts at BSE, generating artificial volume of 39,50,000 units and unlawful gains of approximately Rs. 2,93,81,600. A penalty of Rs. 6,00,000 was imposed under Section 15HA of the SEBI Act.
Full text
Page 2 of 19 Segment at BSE during the investigation period were trades which involved reversal of buy and sell positions by the clients and counterparties in a contract on the same day. It was also observed that the aforesaid trades resulted into alleged creation of artificial volume to the tune of 826.21 crore units or 54.68% of the total market volume in the 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 19 Penalties by Adjudicating Officer) Rules, 1995 (hereinafter referred to as ‘Adjudication Rules’) to inquire into and adjudge under the provisions of section 15HA of the SEBI Act for the aforementioned alleged violation of the provisions of law by the Noticee. Pursuant to the transfer of the undersigned to another department of SEBI, Dr. Anitha Anoop was appointed as the Adjudicating Officer in the matter, vide order dated March 18, 2019. Subsequently, due to the transfer of Dr. Anitha Anoop, the undersigned was once again appointed as the Adjudicating Officer in the matter, vide communique dated November 3, 2020.
Page 4 of 19 contracts. It is further alleged that the Noticee, by executing non genuine trades during the relevant period made unlawful gains of approximately Rs. 2,93,81,600/-. ii. Further, the summary of dealings of the Noticee in the 6 Stock Options contracts in which it had allegedly executed non genuine trades during the relevant period is as follows: Table – Summary of dealings of Noticee in contracts wherein it executed non genuine trades
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Source: SecMarx — sebi:EAD-1/AO/SBM/JR/2021-2022/11853. 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.