sebi:Order/JS/YK/2025-26/32303

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

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Facts / Headnote

Penalty imposed on Noticee for violation of PFUTP Regulations

Provisions invoked

• s. 11B
• s. 11
• s. 15
• s. 11(2)
• s. 15H
• s. 15J
• s. 28A
• s. 11B(2)

Regulations

• Reg. 4
• Reg. 3
• Reg. 4(1)
• Reg. 3(a)
• Reg. 26

Parties

• Rashmi Chandak

Holding

The Noticee violated regulations 3(a), (b), (c), (d) and 4(1), 4(2)(a) of the PFUTP Regulations, 2003 by executing non-genuine reversal trades that created artificial volumes in the stock options segment of BSE, and a monetary penalty of ₹5,00,000 was imposed under section 15HA of the SEBI Act.

Full text

Adjudication Order in respect of Rashmi Chandak in the matter of dealings in Illiquid Stock Options on BSE Page 2 of 19 reversal trades in stock options segment of BSE during the IP. Her 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, her 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 Rashmi Chandak in the matter of dealings in Illiquid Stock Options on BSE Page 3 of 19 7. Vide Part B of the 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”). It 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 proceedings. The scheme commenced from August 22, 2022 and remained open for a period of 3 months. Later, the applicable period of the Settlement Scheme 2022 was extended to January 21, 2023 by SEBI. The SCN was issued to the Noticee by Speed Post Acknowledgement Due (hereinafter referred to as “SPAD”). However, the same was returned undelivered.

Adjudication Order in respect of Rashmi Chandak in the matter of dealings in Illiquid Stock Options on BSE Page 4 of 19 matter of Anilkumar Nandkumar Harchandani & Ors v. SEBI, Ashok Kumar Choudhury v. SEBI, HB Stock Holdings Ltd. v. SEBI, Rajeev Bhanot & Ors. v. SEBI, Mr. Rakesh Kathotia & Ors. v. SEBI, Ashlesh Gunvantbhai Shah v. SEBI, Sanjay Soni v. SEBI and Libord Finance Ltd. v. Whole Time Member, SEBI; (b) Article 137 in the Schedule to the Limitation Act, 1963 is the residual entry which provides the general period of the limitation of three years. It was submitted that for the purpose of issuing a show cause notice under the aforesaid rule 4(1), Article 137 applies and therefore, the Adjudicating Officer must issue a show cause notice within a period of three years from the date of the relevant transactions; (c) All the relevant documents relied upon by SEBI to initiate the instant proceedings in the matter of Illiquid Stock Options has not been provided to the Noticee such as the investigation report, order logs, call and voice logs, copy of statements recorded during investigation and their cross examination, etc. Noticee relied upon the order of Hon’ble Supreme Court in the matter of Price Waterhouse Coopers v. SEBI. (d) SEBI has failed to protect the interest of the investors and has not charged the stock broker nor the stock exchange for their alleged dealings in securities; (e) The power to levy penalty itself was given to the SEBI by way of the 2019 amendment t

Source: SecMarx — sebi:Order/JS/YK/2025-26/32303. 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.