sebi:Order/MC/DS/2018-19/2433
Facts / Headnote
Penalty imposed on Noticee for violation of PFUTP Regulations
Provisions invoked
- s. 15
- s. 15H
- s. 15J
Regulations relied on
- SEBI (PFUTP) Regulations, 2003 — 3(a)
- SEBI (PFUTP) Regulations, 2003 — 4(1)
- SEBI (PFUTP) Regulations, 2003 — 4(2)(a)
Parties
- Kasturbhai Mayabhai Pvt. Ltd.
Holding
The Noticee was held liable for violating regulations 3(a), 4(1) and 4(2)(a) of the PFUTP Regulations by executing non-genuine reversal trades in illiquid stock options that created artificial trading volumes, and a penalty of Rs. 5,00,000 was imposed under Section 15HA of the SEBI Act.
Full text
Page 2 of 12 Fraudulent and Unfair Trading Practices related to Securities Markets) Regulations, (hereinafter, referred to as “PFUTP Regulations”).
Page 3 of 12 reversal trades with the same counterparty on the same day, but at different prices. (c) The trades entered into by the Noticee were reversed on the same day with the same counterparties at a substantial price difference without any significant basis for the change in the contract price, which indicates that these trades were artificial and non-genuine in nature. (d) A summary of dealings of Noticee in 7 Stock Options contracts in which Noticee allegedly executed non-genuine reversal trades during the Investigation Period, as provided in the SCN, is reproduced below:- Note: “Unit” refers to lot size in contract multiplied by number of contracts traded.
Page 4 of 12 any manipulative or deceptive device or contrivance in contravention of the provisions of the Act or the rules or the regulations made there under; (c) employ any device, scheme or artifice to defraud in connection with dealing in or issue of securities which are listed or proposed to be listed on a recognized stock exchange; (d) engage in any act, practice, course of business which operates or would operate as fraud or deceit upon any person in connection with any dealing in or issue of securities which are listed or proposed to be listed on a recognized stock exchange in contravention of the provisions of the Act or the rules and the regulations made there under.
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Source: SecMarx — sebi:Order/MC/DS/2018-19/2433. 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.