sebi:Order/KS/AA/2018-19/2395
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Facts / Headnote
Penalty imposed on the Noticee
Provisions invoked
- s. 15
- s. 19
- s. 15H
- s. 15I
- s. 15J
- s. 15F
- s. 15I(1)
Regulations
- Reg. 3
- Reg. 3(a)
Parties
- Rattan Ispat Private Limited
Holding
The Adjudicating Officer held that Rattan Ispat Private Limited violated Regulations 3(a), (b), (c), (d), 4(1) and 4(2)(a) of the PFUTP Regulations by executing 50 non-genuine reversal trades in 16 stock option contracts, and imposed a penalty of Rs. 5,00,000 under Section 15HA of the SEBI Act.
Full text
Page 2 of 22 crore units or 54.68% of the total market volume in stock options segment of BSE during the Investigation Period. It was observed that Rattan Ispat 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 22 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 50 non genuine trades in 16 Stock Options contracts which resulted in artificial volume of total 1,51,92,000 units. The Noticee made a profit of approx. Rs. 1,60,88,575 by executing non genuine trades during the I.P. Summary of dealings of the Noticee in 16 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 ADPW15MAR75.00CE 0.05 1408000 0.95 1408000 100% 100% 100% 100% 2 ALBK15MAR130.00CE 0.05 600000 1.45 600000 100% 100% 100% 100% 3 ALLD15MAR45.00CE 13.40 280000 21.95 280000 100% 10% 100% 26% 4 ALLD15MAR60.00PE 0.05 712000 2.15 712000 100% 8% 100% 23% 5 ALLD15MAR95.00CEW3 0.05 808000 0.95 808000 100% 38% 100% 46% 6 ANBK15MAR85.00PE 3.45 92000 6.00 92000 100% 14% 100% 5% 7 DISH15MAR100.00CEW3 0.05 348000 1.10 348000 100% 50% 100% 69% 8 DISH15MAR60.00PEW3 0.05 436000 2
Page 4 of 22 6. From the above table, following was noted as regards to dealings of the Noticee: (a) The Noticee has executed non genuine trades in 16 contracts, wherein all trades of the Noticee in 15 contracts were non genuine trades. (b) No. of non genuine trades of the Noticee has significantly contributed to the total no. of trades from the market in the above contracts, as a substantial 3% to 100% of the trades that happened in the aforementioned contracts were due to non-genuine trades executed by the Noticee. (c) A substantial 7% to 100% of volume generated by the Noticee in each of the above contracts was artificial volume, and further artificial volume generated by the Noticee also contributed to 1% to 100% of the total volume from the market in said contracts. (d) Non genuine trades executed by the Noticee in above contracts had significant differential in buy rates and sell rates considering that the trades were reversed on same day.
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Source: SecMarx — sebi:Order/KS/AA/2018-19/2395. 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.