sebi:Order/PB/S./2021-22/14570
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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. 15J
- s. 15F
- s. 28A
Regulations
- Reg. 3
- Reg. 3(a)
Parties
- Nikhil Doshi HUF
Holding
The Noticee violated regulations 3(a), (b), (c), (d), 4(1) and 4(2)(a) of PFUTP Regulations, 2003 by executing 4 non-genuine reversal trades generating artificial volume, and is liable to a monetary penalty of Rs 5,00,000 under Section 15HA of the SEBI Act, 1992.
Full text
Page 2 of 28 2. Pursuant to investigation, it was observed that total 2,91,643 trades comprising substantial 81.38% of all the trades executed in stock options segment of BSE during the IP were non genuine trades. The aforesaid non- genuine trades resulted into creation of artificial volume to the tune of 826.21 crore units or 54.68% of the total market volume in stock options segment of BSE during the IP. It was observed that Nikhil Doshi HUF (PAN: AADHN9640Q) (hereinafter referred to as the “Noticee”) was one of the various entities who 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 were alleged to be manipulative and 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 28 15-I(1) and (2) of SEBI Act, 1992, and if satisfied that penalty is liable, impose such penalty deemed fit in terms of rule 5 of Adjudication Rules and section 15HA of SEBI Act, 1992. Pursuant to transfer of Shri K Saravanan, the undersigned was appointed as Adjudicating Officer in the matter, conveyed vide communique dated July 14, 2021.
Page 4 of 28 6. From the above table, following was noted as regard to dealings of the Noticee: (a) The Noticee has executed non genuine trades in 1 contract, wherein all the trades of the Noticee in the said contract were non genuine trades. (b) Percentage of non-genuine trades of the Noticee in 1 stock options contract to total trades in the said contract was 26.67%. The non- genuine trades of the Noticee have significantly contributed to total trades in the market in the above contract. (c) The percentage of artificial volume generated by the Noticee in the above contract to the total volume from the market in the said contract was 21.16%. Therefore, substantial volume generated by the Noticee in the above contract was artificial volume. (d) Non genuine trades executed by the Noticee in the above contract had significant difference in buy rates and sell rates considering that the trades were reversed on same day.
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Source: SecMarx — sebi:Order/PB/S./2021-22/14570. 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.