sebi:Order/AH/VB/2022-23/16002
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Facts / Headnote
Violation established; penalty of Rs 5,00,000 imposed under Section 15HA of SEBI Act
Provisions invoked
- s. 15
- s. 15H
- s. 15J
- s. 28A
Regulations
- Reg. 4
- Reg. 3
- Reg. 4(1)
- Reg. 3(a)
- Reg. 3(a)(b)(c)
Parties
- Nasik Entertainment World Developers Private Limited
Holding
The Noticee violated regulations 3(a), (b), (c), (d), 4(1) and 4(2)(a) of the PFUTP Regulations, 2003 by executing non-genuine reversal trades creating artificial volume in illiquid stock options at BSE. A penalty of Rs 5,00,000 under section 15HA of the SEBI Act was imposed on Nasik Entertainment World Developers Private Limited.
Full text
Page 2 of 12 indulged in reversal trades. 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. It was therefore alleged that Noticee had executed the reversal trades, which were non-genuine in nature and have created false or misleading appearance of trading in terms of creation of artificial volume in the Stock Options segment at BSE and therefore, it is alleged that the Noticee has violated the provisions of regulations 3(a), (b), (c), (d) and regulation 4(1), 4(2) (a) of the SEBI (Prohibition of Fraudulent and Unfair Trading Practices relating to Securities Markets) Regulations, 2003 (hereinafter referred to as ‘PFUTP Regulations’). In view of the above, adjudication proceedings have been initiated against the Noticee under the provisions of section 15 HA of the Securities and Exchange Board of India Act, 1992 (hereinafter referred to as ‘SEBI Act’). APPOINTMENT OF ADJUDICATING OFFICER
Page 3 of 12 ‘BHEL15APR215.00CEW1’ [i.e. BHEL, April 2015 Weekly European Call Option having maturity on the 1st Week at the Strike Price of Rs.215.00], which led to generation of alleged artificial volume of 2,20,000 units (buy side + sell side). These trades of the Noticee involved reversal with the same counterparty on the same day, but at significantly different price. Details of the reversal trades of Noticee in Stock Options segment of BSE during the investigation period are given in Annexure B.
Page 4 of 12 b. The Noticee’s trades generated artificial volume of 2,20,000 units, (buy side + sell side) which made up 100% of the Noticee’s total volume in the said contract. Overall, the Noticee contributed artificial volume of around 42.31% in the said contract.
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Source: SecMarx — sebi:Order/AH/VB/2022-23/16002. 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.