sebi:MC/DPS/2019-20/2629
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Facts / Headnote
Violation found; penalty of Rs 5,00,000 imposed
Provisions invoked
- s. 15
- s. 15H
- s. 15I
- s. 15J
Regulations
- Reg. 3
- Reg. 3(a)
- Reg. 4(2)(a)
Parties
- K V Ramana Shetty
Holding
The Noticee violated regulations 3(a), 4(1) and 4(2)(a) of the PFUTP Regulations, 2003 by executing non-genuine reversal trades in illiquid stock options on BSE, and is liable for monetary penalty of Rs 5,00,000 under Section 15HA of the SEBI Act.
Full text
Adjudication Order in respect of K V Ramana Shetty in the matter of Dealing in Illiquid options on the BSE Page 2 of 16 of SEBI (Prohibition of Fraudulent and Unfair Trading Practices related to Securities Markets) Regulations, 2003 (hereinafter, referred to as “PFUTP Regulations, 2003”).
Adjudication Order in respect of K V Ramana Shetty in the matter of Dealing in Illiquid options on the BSE Page 3 of 16 c) The trades entered by the Noticee were reversed on the same day with same counterparties at a substantial price difference without any basis for significant change in the contract price which indicates that these trades are artificial and are non-genuine in nature. d) A summary of dealings of Noticee in 15 Stock Options contracts in which Noticee allegedly executed non genuine reversal trades during the Investigation Period, provided in the SCN is reproduced below- Sl. No. Contract Name Avg. Buy Rate (Rs.) Total Buy Volume (no. of units) Avg. Sell Rate (Rs.) Total Sell Volume (no. of units) % of Artificial Volume generated by Noticee in the contract to Noticee’s Total Volume in the Contract % of Artificial Volume generated by Noticee in the contract to Total Volume in the Contract 1 AMBC15JAN220.00CE 31.30 101000 19.15 101000 100% 100% 2 ANBK15FEB115.00PEW1 32.40 100000 24.50 100000 100% 27% 3 BHEL15FEB310.00PEW1 27.73 101000 15.00 101000 100% 100% 4 BHEL15JAN260.00CE 31.05 101000 20.79 101000 100% 100% 5 BIOC15FEB440.00PEW2 34.50 118000 19.03 118000 100% 100% 6 BOIL15FEB230.00CEW1 37.00 101000 25.76 101000 100% 100% 7 CANB15FEB380.00CEW2 21.40 120000 11.45 120000 100% 100% 8 COAL15FEB340.00CEW1 30.53 101000 15.70 101000 100% 100% 9 DLFL15FEB160.00CEW1 12.05 92000 6.10 92000 100% 100% 10 INCM15FEB110.00CE 3.70 104000 0.10 104000 46% 21% 11 LNTF15FEB60.00P
Adjudication Order in respect of K V Ramana Shetty in the matter of Dealing in Illiquid options on the BSE Page 4 of 16 (b) use or employ, in connection with issue, purchase or sale of any security listed or proposed to be listed in a recognized stock exchange, any manipulative or deceptive device or contrivance in contravention of the provisions of the Act or the rules or the regulations made there under; (c) employ any device, scheme or artifice to defraud in connection with dealing in or issue of securities which are listed or proposed to be listed on a recognized stock exchange; (d) engage in any act, practice, course of business which operates or would operate as fraud or deceit upon any person in connection with any dealing in or issue of securities which are listed or proposed to be listed on a recognized stock exchange in contravention of the provisions of the Act or the rules and the regulations made there under.
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Source: SecMarx — sebi:MC/DPS/2019-20/2629. 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.