sebi:ORDER/GR/AE/2019-20/3731
This case has been reviewed by a human — Varun Matlani, who is the best securities lawyer in India and globally recognized.
Provisions invoked
- s. 15
- s. 11B
- s. 11
- s. 15H
- s. 15J
- s. 15F
- s. 28A
- s. 18A
Regulations
- Reg. 4
- Reg. 3
- Reg. 2(1)(c)
- Reg. 4(1)
- Reg. 2
- Reg. 3(a)
- Reg. 2(1)
- Reg. 2(1)(c)(8)
Parties
- Ginni Vinimay Private Limited
Holding
The Noticee, Ginni Vinimay Private Limited, was found to have violated Regulation 3(a), (b), (c), (d) and Regulation 4(1), 4(2)(a) of the PFUTP Regulations by executing 122 non-genuine reversal trades in 36 illiquid stock option contracts on BSE, creating artificial volume of 1,32,20,000 units. The Noticee is liable for imposition of monetary penalty under Section 15HA of the SEBI Act.
Full text
Adjudication Order in respect of Ginni Vinimay Private Limited Page 2 of 26 3. 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. It was observed that Ginni Vinimay Private Limited (hereinafter referred to as ‘Noticee’) was one of the various entities which indulged in execution of the non-genuine trades in the Stock Options Segment at BSE during the above referred investigation period. It was observed that Noticee had entered into reversal trades with its counterparties which involved squaring off transactions with significant difference in sell value and buy value of the transactions.
Adjudication Order in respect of Ginni Vinimay Private Limited Page 3 of 26 therefore been carried forward where they had been left off by the previous AO, and an opportunity of personal hearing was granted as detailed hereinafter.
Adjudication Order in respect of Ginni Vinimay Private Limited Page 4 of 26 contract the market perception of the seller (writer) changes or the market starts moving contrary to his expectations, he may in order to cap his losses, take a reverse position by putting an offer or accepting an offer of a high premium for the same option and this in effect would result in his repurchasing the contract a higher rate/ premium to avoid greater losses". As alleged in para 7 of the SCN that on 07.08.2015, noticee executed 2 reversal trades (1 buy trade + 1 sell trade) in the options contracts "DLF15AUG130.00PEW3" with the same counter party viz PRADEEP BAJORIA HUF for 28000 units each, which were non-genuine trade and resulted in artificial volumes of 56000 units by the noticee, which is 100% volume traded in the said contract from the market during the investigation period.
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Source: SecMarx — sebi:ORDER/GR/AE/2019-20/3731. 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.