sebi:ORDER/SBM/KL/2021-22/13642

SEBI · SEBI · 2021-04-26 · Suresh B Menon, Adjudicating Officer

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Facts / Headnote

Penalty imposed on Noticee for violation of PFUTP Regulations

Provisions invoked

• s. 15
• s. 19
• s. 15H
• s. 15J
• s. 28A
• s. 151

Regulations

• Reg. 3
• Reg. 4(1)
• Reg. 3(a)

Parties

• Abhinandan Stock Broking Private Limited

Holding

The Noticee, Abhinandan Stock Broking Private Limited, 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 at BSE, and a penalty of Rs. 5,00,000 was imposed under Section 15HA of the SEBI Act.

Full text

Adjudication Order in the matter of Dealings in Illiquid Stock Options at BSE Page 2 of 17 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.

Adjudication Order in the matter of Dealings in Illiquid Stock Options at BSE Page 3 of 17 not be held against it and why penalty, if any, should not be imposed on the Noticee under the provisions of section 15HA of the SEBI Act. The SCN issued to the Noticee, inter alia, mentioned the following-: i. It is noted that Noticee was one of the various entities which were indulged in execution of such alleged non-genuine trades in Stock Options Segment of BSE during the Investigation period. Following points deal with the dealings of Noticee during the Investigation period and allegations against it for execution of non-genuine trades. ii. For the purpose of illustration of non-genuine trades and creation of artificial volume by the Noticee, details of trading done by the Noticee in the contract viz. “TATP15FEB80.00PE” on February 20, 2015, is given below: Date Buyer Seller Buy Order Time Sell Order Time Trade Time Trade Rate (Rs.) Trade Quantity 20/02/2015 ABHINANDAN STOCK BROKING PRIVATE LIMITED VARUN KUMAR MASKARA HUF 13:15:44.068805 13:03:23.427201 13:15:44.068805 2.6 248000 20/02/2015 ABHINANDAN STOCK BROKING PRIVATE LIMITED SNEHA BOHRA 13:15:44.068805 13:02:35.934347 13:15:44.068805 2.6 80000 20/02/2015 ABHINANDAN STOCK BROKING PRIVATE LIMITED SNEHA BOHRA 13:15:44.068805 13:02:20.796602 13:15:44.068805 2.55 4000 20/02/2015 SNEHA BOHRA ABHINANDAN STOCK BROKING PRIVATE LIMITED 14:09:10.981343 14:07:16.699965 14:09:10.981343 0.2 84000 20/02/2015 VARUN KUMAR MASKARA HUF ABHINAND

Adjudication Order in the matter of Dealings in Illiquid Stock Options at BSE Page 4 of 17 non-genuine trades. In view of this, it is alleged that such fraudulent trades of the Noticee had resulted into creation of artificial volume of total 6,64,000 units. v. In this regard, details of all the alleged non-genuine trades of the Noticee in Stock Option Segment of BSE during relevant period are attached as Annexure B. From the perusal of the trade data of the alleged non-genuine trades of the Noticee, it is observed that Noticee has allegedly executed non-genuine trades in 1 contracts. The total volume of 6,64,000 units generated by the Noticee in these 1 contracts due to its alleged non-genuine trades was artificial volume generated by the Noticee in the stock option segment of BSE. These alleged non-genuine trades, executed by Noticee in above contracts, had significant differential in buy rates and sell rates considering that the trades were reversed on same day. vi. In view of the foregoing, it is alleged that the Noticee, by indulging in execution of reversal trades in Stock Options with same entities on the same day, which were non-genuine in nature, has created false or misleading appearance of trading in the aforementioned contracts traded in the option segment of BSE. In view of the fact that these options contracts were illiquid in nature, having very small volume in trading, the Noticee allegedly created artificial volumes in stock options which was manipulative and

Source: SecMarx — sebi:ORDER/SBM/KL/2021-22/13642. 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.