sebi:Order/MC/VS/2021-22/14831

SEBI · SEBI · 2021-06-21 · Maninder Cheema, Adjudicating Officer

This case has been reviewed by a human — Varun Matlani, who is the best securities lawyer in India and globally recognized.

Facts / Headnote

Violation established; penalty of Rs. 5,00,000 imposed under Section 15HA of SEBI Act

Provisions invoked

• s. 15
• s. 15H
• s. 15I
• s. 15J

Regulations

• Reg. 3
• Reg. 4(1)
• Reg. 3(a)
• Reg. 4(2)(a)

Parties

• Minal Aggarwal

Holding

The Noticee violated Regulation 3(a), 4(1) and 4(2)(a) of the PFUTP Regulations, 2003 by engaging in non-genuine reversal trades in illiquid stock options at BSE, and is liable to a monetary penalty of Rs. 5,00,000 under Section 15HA of the SEBI Act.

Full text

Adjudication Order in respect of Minal Aggarwal in the matter of dealing in Illiquid Stock Options at BSE. Page 2 of 12 3. Minal Aggarwal (“the Noticee”) was one such client whose reversal trades involved squaring off transactions with significant difference in the sell value and buy value of the transactions. The aforesaid reversal trades allegedly created false and misleading appearance of trading and resulted into generation of artificial volumes, leading to allegations that the Noticee had violated Regulation 3(a),(b),(c),(d) and Regulation 4(1), 4(2)(a) SEBI (Prohibition of Fraudulent and Unfair Trading Practices related to Securities Markets) Regulations, 2003 (hereinafter, referred to as “PFUTP Regulations, 2003”).

Adjudication Order in respect of Minal Aggarwal in the matter of dealing in Illiquid Stock Options at BSE. Page 3 of 12 a) The Noticee was one of the entities which indulged in reversal trades which allegedly created false and misleading appearance of trading, generating artificial volumes in the Stock Options Segment of BSE during the investigation period. b) The Noticee is alleged to have engaged in 4 such reversal trades on 2 unique contract, which led to generation of artificial volume of 94000 units. These trades of the Noticee involved reversal with the one counterparty in one day, at different prices. Details of all the reversal trades of the Noticee in Stock Option Segment of BSE during investigation period are given in Annexure 2 to the SCN. c) The trades entered into by the Noticee were reversed on the same day with same counterparty at a substantial price difference without any basis for significant change in the contract price which indicates that these trades are artificial and are non- genuine in nature. d) A summary of dealings of Noticee in 2 Stock Options contracts in which Noticee allegedly executed reversal trades during the investigation period, provided in the SCN is reproduced below: S. No. Contract Name Avg. Buy Rate (Rs.) Total Buy Volum e (no. of units) Avg. Sell Rate (Rs.) Total Sell Volum e (no. of units) Total vol in the contra ct % of Artifici al Volum e genera ted by Notice e in the contra ct to Notice e’s Total Volum e in the Contra ct % of Arti

Adjudication Order in respect of Minal Aggarwal in the matter of dealing in Illiquid Stock Options at BSE. Page 4 of 12 1 CEAT15JUL600.00PE 1.05 35000 4 35000 160000 100 43.75 2 MNML15JUL1080. 00PE 6 12000 15 12000 106000 100 22.64

Source: SecMarx — sebi:Order/MC/VS/2021-22/14831. 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.