sebi:ORDER/SRP/HKS/2018-19/1743

SEBI · SEBI · 2018-09-24 · Satya Ranjan Prasad, Adjudicating Officer

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Facts / Headnote

Violation established; penalty of Rs.5,00,000 imposed under Section 15HA

Provisions invoked

• s. 15
• s. 15H
• s. 15J
• s. 15F

Regulations

• Reg. 4
• Reg. 3
• Reg. 2
• Reg. 3(a)
• Reg. 2(1)

Parties

• Ganga Nagar Commodity Limited

Holding

The Noticee executed non-genuine reversal trades in illiquid Stock Options at BSE with same entities on the same day creating artificial volume and false appearance of trading, thereby violating Regulations 3(a),(b),(c),(d) and 4(1),4(2)(a) of PFUTP Regulations and is liable for penalty under Section 15HA of the SEBI Act, with penalty of Rs.5,00,000 imposed.

Full text

Adjudication Order in respect of Ganga Nagar Commodity Limited Page 2 of 20 APPOINTMENT OF ADJUDICATING OFFICER 2. Initially, Shri Biju. S was appointed as the Adjudicating Officer by SEBI, in the matter. Subsequently, on July 06, 2018 the undersigned has been appointed as the Adjudicating Officer, to inquire into and adjudge under Section 15HA of the Securities and Exchange Board of India Act, 1992, (hereinafter referred to as “SEBI Act”) the aforesaid violations alleged to have been committed by the Noticee.

Adjudication Order in respect of Ganga Nagar Commodity Limited Page 3 of 20 executed on the anonymous platform of the Exchange, without any knowledge of counter party, at price ranges that were permitted by the Exchange and SEBI and the obligations arising out of it have been settled through the clearing mechanism of the Exchange. Further the reasons of trades being carried out at a substantial price difference and reversed with the same party are also genuine as the RDD issued by SEBI envisages such a situation and also warns the investors and traders against them as it accepts that these are bound to happen.

Adjudication Order in respect of Ganga Nagar Commodity Limited Page 4 of 20 6. It is also noteworthy that Noticee’s trades have matched with different entities. Had the trades been non-genuine, it ought to be related to the counter parties. The SCN does not provide an iota of evidence as to how Noticee is related to the counter parties. It is therefore submitted that counterparties were not related to the Noticee.

Source: SecMarx — sebi:ORDER/SRP/HKS/2018-19/1743. 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.