sebi:Order/PB/S./2021-22/14891

SEBI · SEBI · 2021-04-26 · Parag Basu, Adjudicating Officer

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Facts / Headnote

Penalty of Rs 5,00,000 imposed on the Noticee under section 15HA of the SEBI Act, 1992 for violation of PFUTP Regulations, 2003

Provisions invoked

• s. 15
• s. 19
• s. 15H
• s. 15J
• s. 15F
• s. 28A

Regulations

• Reg. 3
• Reg. 3(a)

Parties

• Nidhi Umang Shah

Holding

The Noticee violated regulations 3(a), (b), (c), (d), 4(1) and 4(2)(a) of the PFUTP Regulations, 2003 by executing non-genuine reversal trades in stock options. A monetary penalty of Rs 5,00,000 under section 15HA of the SEBI Act, 1992 was imposed on the Noticee.

Full text

Page 2 of 29 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. It was observed that Nidhi Umang Shah (PAN: BLEPS5314M) (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 relating to Securities Market) Regulations, 2003 (hereinafter referred to as “PFUTP Regulations, 2003”).

Page 3 of 29 in the manner specified under rule 4 of Adjudication Rules read with section 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 29 S. No. Contract Name Avg. Buy Rate (`) 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 IFCI15APR26.00CEW2 7.48 344000 10.7 344000 100 25 100 42.16 2 NHPC15APR12.00CEW2 6.2 300000 10.35 300000 100 9.09 100 13.89 3 NHPC15APR12.00CEW3 6.33 150000 10.55 150000 100 5.48 100 5.15 4 NHPC15APR14.00CEW3 3.3 70000 7.8 70000 100 10 100 15.91 5 NHPC15MAR12.00CE 7.4 210000 10.25 210000 100 5.88 100 9.95 6 UNIT15APR10.00CEW2 4.83 261000 8.37 261000 100 100 100 100 7 UNIT15APR8.00CEW3 5 72000 9 72000 100 10 100 9.3 8 UNIT15MAR10.00CE 6.05 27000 9.55 27000 100 16.67 100 12.5 9 UNIT15MAR8.00CE 7.88 216000 12.35 216000 100 25 100 34.29

Source: SecMarx — sebi:Order/PB/S./2021-22/14891. 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.