sebi:Order/KS/AA/2018-19/2352

SEBI · SEBI · 2018-04-03 · K Saravan, Chief General Manager & Adjudicating Officer

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Facts / Headnote

Violation of PFUTP Regulations established; monetary penalty imposed under Section 15HA of SEBI Act

Provisions invoked

• s. 15
• s. 19
• s. 15H
• s. 15I
• s. 15J
• s. 15F
• s. 15I(1)

Regulations

• Reg. 3
• Reg. 4(2)(a)
• Reg. 3(a)
• Reg. 3(b)
• Reg. 3(c)
• Reg. 2(l)(c)

Parties

• Satyam Castings Private Limited

Holding

The Adjudicating Officer held that Satyam Castings Private Limited violated regulations 3(a), (b), (c), (d), 4(1) and 4(2)(a) of the PFUTP Regulations by executing 58 non-genuine reversal trades in 26 stock option contracts on BSE, generating artificial volume of 1,07,96,832 units. A monetary penalty was imposed under Section 15HA of the SEBI Act.

Full text

Page 2 of 28 crore units or 54.68% of the total market volume in stock options segment of BSE during the Investigation Period. It was observed that Satyam Castings Private Limited (hereinafter referred to as the “Noticee”) was one of the various entities which indulged in execution of reversal trades in stock options segment of BSE during the Investigation Period. 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 alleged to be manipulative, deceptive in nature. In view of the same, SEBI initiated adjudication 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) Regulations, 2003 (hereinafter referred to as “PFUTP Regulations”).

Page 3 of 28 of the SEBI Act for the violations alleged to have been committed by the Noticee. 5. It was inter alia alleged in the SCN that the Noticee had executed 58 non genuine trades in 26 Stock Options contracts which resulted in artificial volume of total 1,07,96,832 units. The Noticee made a profit of approx. Rs. 2,38,40,345 by executing non genuine trades during the I.P. Summary of dealings of the Noticee in 26 Stock Options contracts, in which the Noticee allegedly executed non genuine trades during the I.P, is as follows: S. No. Contract Name Avg. Buy Rate (Rs.) Total Buy Volume (No. of units) Avg. Sell Rate Total Sell Volume (No. of units) % of Non Genuine trades of Noticee in the contract to Noticee's Total trades in the Contract % of Non Genuine trades of Noticee in the contract to Total trades in the Contract % of Artificial Volume generated by Noticee in the contract to Noticee's Total Volume in the Contract % of Artificial Volume generated by Noticee in the contract to Total Volume in the Contract 1 ADPW15JUL40.00PE 6.00 200000 11.00 200000 100% 100% 100% 100% 2 ANBK15JUN60.00CE 7.70 192000 13.40 192000 100% 8% 100% 22% 3 BIOC15MAR430.00CE 4.00 222000 13.00 222000 100% 11% 100% 19% 4 BIOC15MAR440.00PE 4.50 200000 14.50 200000 100% 25% 100% 23% 5 BOBL15AUG180.00PE 0.20 76000 6.80 76000 100% 25% 100% 46% 6 BOIL15JUL175.00CEW4 4.00 86000 9.80 86000 100% 33% 100% 40% 7 DISH15JUN120.00PE 8.70 92000 14.00 92000 100% 50% 100% 88% 8 DISH15JUN95.00CE 6.70 116000 11.00

Page 4 of 28 17 IBRL15AUG50.00PEW2 0.10 180000 2.27 180000 100% 33% 100% 29% 18 IFCI15AUG22.00PEW3 0.05 504000 0.84 504000 100% 30% 100% 43% 19 LNTF15SEP75.00PE 8.10 92000 12.34 92000 100% 25% 100% 22% 20 MFSL15JUL280.00PE 1.00 69000 9.00 69000 100% 100% 100% 100% 21 RANB15MAR820.00CE 7.63 204000 17.30 204000 50% 7% 66% 9% 22 RLNF15MAR460.00CE 3.80 237500 11.80 237500 100% 5% 100% 23% 23 SAIL15JUL50.00PE 0.15 296000 2.50 296000 100% 7% 100% 15% 24 UBIL15JUL150.00PE 1.50 26000 3.00 26000 100% 100% 100% 100% 25 UCOB15JUL45.00CE 6.00 232000 9.00 232000 100% 14% 100% 28% 26 VOLT15MAR280.00CE 10.00 183000 16.00 183000 100% 13% 100% 13%

Source: SecMarx — sebi:Order/KS/AA/2018-19/2352. 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.