sebi:Order/KS/AA/2019-20/2982
Facts / Headnote
Violation established; penalty of Rs. 5,00,000 imposed under Section 15HA of the SEBI Act
Provisions invoked
- s. 15
- s. 19
- s. 15H
- s. 15I
- s. 15J
- s. 15F
- s. 15I(1)
Regulations relied on
- SEBI (PFUTP) Regulations, 2003 — 3(a)
- SEBI (PFUTP) Regulations, 2003 — 3(b)
- SEBI (PFUTP) Regulations, 2003 — 3(c)
- SEBI (PFUTP) Regulations, 2003 — 3(d)
- SEBI (PFUTP) Regulations, 2003 — 4(1)
- SEBI (PFUTP) Regulations, 2003 — 4(2)(a)
Parties
- RJB Constructions Private Limited
Holding
The Noticee violated Regulations 3(a), (b), (c), (d), 4(1) and 4(2)(a) of the PFUTP Regulations by executing 41 non-genuine reversal trades in 9 stock option contracts creating artificial volume of 53,49,000 units, and is liable to a monetary 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 RJB Constructions 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 41 non genuine trades in 9 Stock Options contracts which resulted in artificial volume of total 53,49,000 units. The Noticee made a loss of approx. Rs. 1,04,96,100 by executing non genuine trades during the I.P. Summary of dealings of the Noticee in 9 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 ALLD15MAR50.00PEW2 3.22 312000 0.05 312000 100% 40% 100% 37% 2 BPCL15MAR700.00CE 43.37 48500 10.01 48500 100% 26% 100% 19% 3 DLFL15MAR165.00CE 7.58 302000 2.00 302000 100% 25% 100% 26% 4 IDBI15MAR50.00CE 23.75 36000 14.05 36000 100% 33% 100% 12% 5 JSWE15MAR90.00PEW2 2.28 228000 0.05 228000 100% 82% 100% 77% 6 MPSL15MAR300.00PEW3 4.80 500000 0.05 500000 100% 29% 100% 32% 7 PFCL15MAR300.00CE 5.99 200000 1.75 200000 100% 7% 100% 9% 8 RCOM15MAR60.00PEW3 2.56 444000 0.08 4440
Page 4 of 22 (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 7% to 100% of the trades that happened in the aforementioned contracts were due to non-genuine trades executed by the Noticee. (c) A substantial 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 6% 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.
You have read the preview. Create a free account to read the full order, track this party, and analyse it in Ontology.
Free accounts include 10 searches/day with full order access.
Source: SecMarx — sebi:Order/KS/AA/2019-20/2982. 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.