sebi:Order/KS/AA/2019-20/2983
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Facts / Headnote
Violation established; penalty of Rs. 5,00,000 imposed under Section 15HA
Provisions invoked
- s. 15
- s. 19
- s. 15H
- s. 15I
- s. 15J
- s. 15F
- s. 15I(1)
Regulations
- Reg. 3
- Reg. 3(a)
Parties
- Shri Rakeshkumar Rameshkumar Pandey
Holding
The Noticee violated Regulations 3(a)-(d), 4(1) and 4(2)(a) of the PFUTP Regulations by executing 27 non-genuine reversal trades in 4 illiquid BSE stock option contracts creating artificial volume of 31,18,000 units. A monetary penalty of Rs. 5,00,000 was imposed under Section 15HA of the SEBI Act.
Full text
Page 2 of 21 crore units or 54.68% of the total market volume in stock options segment of BSE during the Investigation Period. It was observed that Shri Rakeshkumar Rameshkumar Pandey (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 21 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 27 non genuine trades in 4 Stock Options contracts which resulted in artificial volume of total 31,18,000 units. The Noticee made a loss of approx. Rs. 1,98,12,450 by executing non genuine trades during the I.P. Summary of dealings of the Noticee in 4 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 DISH15MAR105.00PE 27.76 472000 16.30 472000 100% 80% 100% 83% 2 DLFL15APR135.00CEW1 34.00 296000 17.40 296000 100% 44% 100% 41% 3 IRBI15APR220.00CEW1 38.15 341000 23.41 341000 100% 50% 100% 49% 4 SUNT15MAR440.00PE 26.47 450000 16.55 450000 100% 78% 100% 88%
Page 4 of 21 (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 significant 41% to 88% 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/2019-20/2983. 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.