sebi:Order/AK/RA/2022-23/15812

SEBI · SEBI · 2021-07-02 · Amit Kapoor, Adjudicating Officer

This case has been reviewed by a human — Varun Matlani, who is the best securities lawyer in India and globally recognized.

Facts / Headnote

Penalty imposed on Noticee for violation of PFUTP Regulations

Provisions invoked

• s. 15
• s. 15H
• s. 15I
• s. 15J
• s. 15F
• s. 28A

Regulations

• Reg. 3
• Reg. 3(a)

Parties

• Arpit Rathi

Holding

The Noticee Arpit Rathi was found to have violated Regulations 3(a), (b), (c), (d), 4(1) and 4(2)(a) of the PFUTP Regulations by executing three non-genuine reversal trades in a single stock option contract at BSE, generating 100% artificial volume, and a penalty of Rs. 5,00,000 was imposed under Section 15HA of the SEBI Act.

Full text

Adjudication Order in respect of Arpit Rathi in the matter of dealings in Illiquid Stock Options at BSE Page 2 of 15 proceedings against the Noticee for violation of the provisions of Regulations 3(a), (b), (c), (d), 4(1) and 4(2)(a) of SEBI (Prohibition of Fraudulent and Unfair Trade Practices relating to Securities Market) Regulations, 2003 (hereinafter referred to as “PFUTP Regulations”).

Adjudication Order in respect of Arpit Rathi in the matter of dealings in Illiquid Stock Options at BSE Page 3 of 15 7. The Noticee made its submissions, vide letter dated on August 19, 2021, denying the aforesaid allegations on inter alia, the following main grounds:  Neither BSE nor SEBI had raised any grievance at that point of time.  SCN is issued very late. Such a long delay in initiation of the proceedings by itself poses grave difficulties and extreme hardship for anybody’s defence.  No relation with the counterparty. It is absolutely a matter of pure coincidence.  It is necessary to prove meeting of minds in order to allege creation of artificial volume.  The alleged violations have not caused any loss to any investor and there are no investor complaints in this regard.

Adjudication Order in respect of Arpit Rathi in the matter of dealings in Illiquid Stock Options at BSE Page 4 of 15 the need for cross examination does not arise. Also, the personal hearing in the instant matter was rescheduled to January 28, 2022 at 12:00 P.M.

Source: SecMarx — sebi:Order/AK/RA/2022-23/15812. 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.