sebi:Order/KS/AA/2018-19/2578

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

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Facts / Headnote

Penalty imposed on the Noticee for violation of PFUTP Regulations

Provisions invoked

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

Regulations

• Reg. 4
• Reg. 3
• Reg. 200
• Reg. 4(1)
• Reg. 3(a)
• Reg. 3(a)(b)(c)

Parties

• Sarva Mangalam Gajanan Steel Private Limited

Holding

The Adjudicating Officer held that Sarva Mangalam Gajanan Steel Private Limited violated Regulations 3(a), (b), (c), (d), 4(1) and 4(2)(a) of the PFUTP Regulations, 2003 by executing 337 non-genuine reversal trades in 158 stock option contracts on BSE, and imposed a penalty of Rs. 12,50,000 under Section 15HA of the SEBI Act.

Full text

Page 2 of 27 crore units or 54.68% of the total market volume in stock options segment of BSE during the Investigation Period. It was observed that Sarva Mangalam Gajanan Steel 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 27 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 337 non genuine trades in 158 Stock Options contracts which resulted in artificial volume of total 3,25,51,056 units. The Noticee made a profit of approx. Rs. 1,48,87,233 by executing non genuine trades during the I.P. Summary of dealings of the Noticee in 158 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 ADEL15AUG70.00CE 2.00 21000 9.75 21000 100% 33% 100% 17% 2 ADEL15AUG85.00PEW2 0.20 20000 1.50 20000 100% 29% 100% 6% 3 ADPW15AUG26.00PE 3.25 44000 4.90 44000 100% 13% 100% 9% 4 ADPW15JUL26.00PEW2 0.05 100000 0.80 100000 100% 13% 100% 4% 5 ADPW15JUL28.00PEW2 0.10 100000 0.85 100000 100% 50% 100% 16% 6 ALBK15AUG90.00PE 5.00 24000 7.50 24000 100% 33% 100% 17% 7 ALBK15JUL80.00PE 0.10 42000 0.90 42000 100% 7% 100% 4% 8 ALLD15JUL65.00PEW2 0.05 100000 0.90 100000 100%

Page 4 of 27 17 ANBK15JUN65.00PE 0.05 12000 1.10 12000 100% 11% 100% 2% 18 ANBK15JUN80.00CE 0.05 40000 0.90 40000 100% 29% 100% 4% 19 ANBK15JUN85.00CE 0.05 24000 0.90 24000 100% 33% 100% 17% 20 APLT15AUG205.00PEW3 12.90 30000 22.00 30000 100% 12% 100% 15% 21 BOBL15JUL145.00CEW3 0.75 20000 5.00 20000 100% 50% 100% 16% 22 CANB15JUL270.00CEW2 10.00 4000 16.50 4000 100% 33% 100% 6% 23 CANB15JUL310.00CEW1 0.05 10000 0.80 10000 100% 40% 100% 6% 24 CARN15AUG130.00CE 2.50 27000 9.10 27000 100% 50% 100% 17% 25 DABU15AUG290.00CEW3 8.00 16000 17.00 16000 100% 17% 100% 5% 26 DABU15AUG310.00PEW2 8.00 50000 15.50 50000 100% 4% 100% 6% 27 DISH15AUG95.00CE 2.00 28000 7.50 28000 100% 50% 100% 17% 28 DISH15JUL125.00CEW1 0.05 36000 1.50 36000 100% 29% 100% 10% 29 DLFL15SEP115.00PEW1 0.50 4000 3.50 4000 100% 50% 100% 17% 30 EXID15AUG155.00CEW3 6.00 18000 12.50 18000 100% 13% 100% 8% 31 FEDB15JUL160.00CEW1 0.05 40000 0.80 40000 100% 29% 100% 14% 32 FEDB15SEP55.00CEW2 5.00 16000 7.50 16000 100% 33% 100% 17% 33 FEDB15SEP70.00PEW2 6.00 28000 11.00 28000 100% 17% 100% 12% 34 GAIL15AUG330.00CEW3 3.00 22000 6.00 22000 100% 40% 100% 17% 35 GMRI15AUG12.00PEW1 0.10 520000 0.55 520000 100% 13% 100% 15% 36 GMRI15AUG12.00PEW2 0.05 117000 0.30 117000 100% 12% 100% 5% 37 GMRI15AUG12.00PEW3 0.15 78000 0.65 78000 100% 12% 100% 7% 38 GMRI15AUG16.00CEW3 0.10 78000 1.00 78000 100% 33% 100% 17% 39 GMRI15JUL10.00PEW1 0.05 39000 0.90 39000 100% 40% 100% 15% 40 GMRI15JUL12.00PEW4 0.05 845000 0.60 845000 100% 29% 100% 2

Source: SecMarx — sebi:Order/KS/AA/2018-19/2578. 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.