sebi:ORDER/GR/KG/2019-20/4418
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Facts / Headnote
Penalty imposed on the Noticee for violation of PFUTP Regulations
Provisions invoked
- s. 15
- s. 19
- s. 15H
- s. 15J
- s. 15F
- s. 28A
- s. 2(1)
Regulations
- Reg. 4
- Reg. 3
- Reg. 2(1)(c)
- Reg. 4(1)
- Reg. 2(1)
- Reg. 2
- Reg. 3(a)
- Reg. 2(1)(c)(8)
Parties
- Dowell Fiscal Services Private Limited
Holding
The Noticee violated Regulations 3(a), (b), (c), (d) and 4(1), 4(2)(a) of the PFUTP Regulations by executing non-genuine reversal trades in illiquid stock options at BSE, creating artificial volume and a false and misleading appearance of trading, and a penalty of Rs. 5,00,000/- was imposed under Section 15HA of the SEBI Act.
Full text
Adjudication Order in respect of Dowell Fiscal Services Private Limited Page 2 of 20 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 Dowell Fiscal Services 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 Dowell Fiscal Services Private Limited Page 3 of 20 in the place of Shri Biju. S. Thereafter, the undersigned was appointed as the AO in the instant matter, communicated vide order dated May 22, 2019. These proceedings are 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 Dowell Fiscal Services Private Limited Page 4 of 20 S. No. Contract Name Avg. Buy Rate (Rs.) Total Buy Volume (no. of units) Avg. Sell Rate (Rs.) Total Sell Volume (no. of units) % of Non Genuine trades of Noticee in the contract to Noticee’s Total trades in the Contract % of Non Genuine trades of Entity in the contract to Total trades in the Contract % of Artificial Volume generated by Noticee in the contract to Noticee’s Total Volume in the Contract % of Artificial Volume generate d by Noticee in the contract to Total Volume in the Contract 1 ALBK15MAR8 5.00CEW2 19.17 226000 30.25 226000 80% 33% 98% 42% 2 AMTK15MAR 140.00CEW1 10.35 136000 21.00 136000 100% 13% 100% 22% 3 CRGL15MAR 160.00CEW1 12.00 188000 20.95 188000 100% 13% 100% 18% 4 IBRL15MAR6 0.00CEW1 10.10 320000 17.71 320000 100% 100% 100% 100% 5 INCM15MAR1 00.00PEW1 0.25 282000 3.50 282000 100% 60% 100% 66% 6 SAIL15MAR5 0.00CEW2 9.50 488000 16.52 488000 100% 100% 100% 100% 7 TGBL15MAR1 40.00CEW1 11.15 406000 19.21 406000 100% 100% 100% 100%
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Source: SecMarx — sebi:ORDER/GR/KG/2019-20/4418. 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.