sebi:Order/GR/PU/2021-22/15068
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Facts / Headnote
Violation established; penalty of Rs 5,00,000 imposed under Section 15HA of the SEBI Act
Provisions invoked
- s. 15
- s. 19
- s. 15H
- s. 15J
- s. 15F
- s. 28A
Regulations
- Reg. 3
- Reg. 2(1)(c)
- Reg. 2
- Reg. 3(a)
- Reg. 2(1)
- Reg. 2(1)(c)(8)
Parties
- Goodfaith Infra Ventures Private Limited (PAN: AAECG6498B)
Holding
The Noticee was found to have violated Regulations 3(a), (b), (c), (d), 4(1) and 4(2)(a) of the PFUTP Regulations, 2003 by executing reversal trades in stock options at BSE that were non-genuine and created artificial volume, and a penalty of Rs 5,00,000 was imposed under Section 15HA of the SEBI Act.
Full text
Page 2 of 22 2. Pursuant to the investigation, it was observed that total 2,91,643 trades comprising substantial 81.38% of all the trades executed in stock options segment of BSE during the IP were non genuine trades. The aforesaid non-genuine trades resulted into creation of artificial volume to the tune of 826.21 crore units or 54.68% of the total market volume in stock options segment of BSE during the IP. It was observed that Goodfaith Infra Ventures Pvt. Ltd. (PAN-AAECG6498B) (hereinafter referred to as the “Noticee”) was one of the various entities who indulged in execution of reversal trades in stock options segment of BSE during the IP. Such trades were observed to be non-genuine in nature and created false or misleading appearance of trading in terms of artificial volumes in stock options and therefore were alleged to be manipulative as well as deceptive in nature. In view of the same, SEBI initiated adjudication proceedings against the Noticee for the violation of provisions of Regulations 3(a), (b), (c), (d), 4(1) and 4(2)(a) of SEBI (Prohibition of Fraudulent and Unfair Trade Practices) Regulations, 2003 (hereinafter referred to as “PFUTP Regulations, 2003”).
Page 3 of 22 4. Accordingly, a Settlement Scheme was framed under the SEBI (Settlement Proceedings) Regulations, 2018, which provided one-time opportunity for settlement of proceedings in the Illiquid Stock Options matter. The said scheme was kept open from August 01, 2020 till December 31, 2020. Adjudication proceedings were initiated against those entities who had not availed of the opportunity of settlement.
Page 4 of 22 7. The SCN with reference number SEBI/HO/EAD/EAD-4/P/OW/2021/24241/1 was issued to the Noticee via Speed Post Acknowledgement Due (SPAD) and also via email dated September 20, 2021. The SCN issued through SPAD had returned undelivered, however the SCN sent vide e-mail dated September 20, 2021 was duly delivered to the Noticee. Thereafter, vide e-mail dated October 06, 2021, an opportunity of personal hearing was granted to the Noticee on October 26, 2021. The Noticee vide its letter dated October 16, 2021, requested for adjournment of the said personal hearing. Subsequently, vide letter dated October 22, 2021, the Noticee filed its partial response in the matter. Accordingly, vide e-mail dated October 25, 2010 another opportunity of personal hearing was granted to the Noticee on November 02, 2021. Thereafter, vide e-mail dated November 01, 2021, the Noticee sought another adjournment of the said personal hearing in the matter. Further, the Noticee submitted its additional reply vide letter dated October 31, 2021, in the matter. Thereafter, vide e-mail dated November 01, 2021, a last and final opportunity of personal hearing was granted to the Noticee on November 09, 2021. Vide e-mail dated November 08, 2021, the Noticee once against sought for adjournment of the said personal hearing. The said request for adjournment was not acceded to and the same was communicated to the Noticee vide e-mail dated November 09, 2021. However, the Noticee did not attend the said pe
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Source: SecMarx — sebi:Order/GR/PU/2021-22/15068. 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.