sebi:Order/KS/PP-AS/2021-22/11607
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Facts / Headnote
Violation established; penalty of Rs. 5,00,000 imposed under Section 15HA of the SEBI Act, 1992
Provisions invoked
- s. 15
- s. 19
- s. 15H
- s. 15J
- s. 15F
- s. 28A
Regulations
- Reg. 3
- Reg. 4
- Reg. 4(1)
- Reg. 3(a)
- Reg. 6(1)(c)
Parties
- Sandeep Chhabra
Holding
The Noticee violated Regulations 3(a), (b), (c), (d), 4(1) and 4(2)(a) of the PFUTP Regulations, 2003 by executing 14 non-genuine reversal trades in 7 stock options contracts on BSE that created artificial volume, and a penalty of Rs. 5,00,000 was imposed under Section 15HA of the SEBI Act, 1992.
Full text
Page 2 of 20 segment of BSE during the IP. It was observed that Sandeep Chhabra (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 IP. 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, 2003”).
Page 3 of 20 5. It was inter alia alleged in the SCN that the Noticee executed 14 non genuine trades in 7 Stock Options contracts which resulted in artificial volume of total 1,82,32,000 units. The Noticee made a loss of approx. Rs. 2,09,49,000/- by executing non genuine trades during the IP. Summary of dealings of the Noticee in 7 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 ANBK15MAR85.00CE 0.60 2500000 0.10 2500000 100% 13% 100% 37% 2 IFCI15APR30.00PEW1 0.85 4000000 0.10 4000000 100% 40% 100% 93% 3 JSPL15MAR170.00PE 19.00 500000 9.00 500000 100% 29% 100% 86% 4 PGCL15MAR140.00PE 1.60 666000 0.10 666000 100% 100% 100% 100% 5 PTCI15MAR85.00CE 1.10 700000 0.10 700000 100% 3% 100% 10% 6 RELI15MAR840.00CE 13.00 500000 3.00 500000 100% 2% 100% 30% 7 STAC15MAR1100.00CE 23.00 250000 3.00 250000 100% 13% 100% 46%
Page 4 of 20 (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 10% 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/PP-AS/2021-22/11607. 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.