sebi:Order/JS/RJ/2025-26/32243

SEBI · SEBI · 2025-04-04 · Jai Sebastian, Adjudicating Officer

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Facts / Headnote

Violation established; monetary penalty imposed

Provisions invoked

• s. 11B
• s. 11
• s. 15
• s. 15H
• s. 15J
• s. 28A

Regulations

• Reg. 4
• Reg. 3
• Reg. 3(a)
• Reg. 26

Parties

• Madhu Gupta

Holding

The Adjudicating Officer held that Madhu Gupta violated regulations 3(a), (b), (c), (d), 4(1) and 4(2)(a) of the PFUTP Regulations by executing non-genuine reversal trades in illiquid stock options. A monetary penalty of Rs. 5,00,000 under section 15HA of the SEBI Act was imposed.

Full text

Adjudication Order in respect of Madhu Gupta in the matter of dealings in Illiquid Stock Options on BSE Page 2 of 12 3. During the IP, 14,720 entities were found to have executed non-genuine trades in BSE’s stock options segment. It was observed that Madhu Gupta (hereinafter referred to as the “Noticee”) was one of the entities who indulged in execution of reversal trades in stock options segment of BSE during the IP. The Noticee’s trades were alleged to be non-genuine in nature which created false or misleading appearance of trading in terms of artificial volumes in stock options. Therefore, Noticee’s trades were alleged to be manipulative and deceptive in nature. In view of the same, SEBI initiated adjudication proceedings against the Noticee for alleged 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) Regulations, 2003 (hereinafter referred to as “PFUTP Regulations”).

Adjudication Order in respect of Madhu Gupta in the matter of dealings in Illiquid Stock Options on BSE Page 3 of 12 6. Vide Part B of the above referred SCN, Noticee was informed that SEBI had introduced a Settlement Scheme, i.e., SEBI Settlement Scheme, 2022 (hereinafter referred to as “Settlement Scheme 2022”) in terms of regulation 26 of the Securities and Exchange Board of India (Settlement Proceedings) Regulations, 2018 (hereinafter referred to as “Settlement Regulations”). Noticee was informed that the Settlement Scheme 2022 provides a one-time opportunity to the entities against whom proceedings were initiated and appeals against the said proceedings were pending to settle the proceeding. The scheme commenced from August 22, 2022 and remained open for a period of three months. Later, the applicable period of the Settlement Scheme 2022 was extended to January 21, 2023 by SEBI. The said SCN was duly served upon the Noticee through National Securities Depository Limited and email.

Adjudication Order in respect of Madhu Gupta in the matter of dealings in Illiquid Stock Options on BSE Page 4 of 12 “5. There is no assertion in the memorandum of appeal alleging non-receipt of the show cause notice through email. In view of Rule 7(b) of the Rules, service of the show cause notice was duly served through email. We are consequently of the opinion that the procedure adopted by the AO for serving the show cause notice was in accordance with the Rule 7(b) of the Rules.” (Emphasis supplied)

Source: SecMarx — sebi:Order/JS/RJ/2025-26/32243. 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.