sebi:Order/PR/KD/2021-22/14431
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Facts / Headnote
Violation of regulations 3(a), (b), (c), (d), 4(1) and 4(2)(a) of PFUTP Regulations, 2003 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. 3(a)
Parties
- Bimla Devi Mundra (PAN: CBZPM6743E)
Holding
The Noticee was found to have 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 a stock option contract 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 16 2. Pursuant to investigation, it was observed that total of 2,91,744 trades comprising substantial 81.40% of all the trades executed in stock options segment of BSE during the IP were non-genuine trades. The aforesaid non-genuine trades resulted in the 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 Bimla Devi Mundra (PAN- CBZPM6743E) (hereinafter referred to as the “Noticee”) was one among 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, 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 16 that penalty is liable, impose such penalty deemed fit in terms of rule 5 of Adjudication Rules and section 15HA of SEBI Act, 1992.
Page 4 of 16 6. From the above table, the following is noted as regard to the dealings of the Noticee: a. The Noticee had executed non-genuine trades in one unique contract, wherein all the trades of Noticee in the said contract were non-genuine trades. b. The non-genuine trades executed by the Noticee in the above contract had significant difference in the buy and sell rates considering that the trades were reversed on same day within around three minutes without any significant change in the price of the underlying, which indicates that these trades were non-genuine in nature. c. The entire volume generated by the Noticee in the above contract was artificial volume, and further, the artificial volume generated by the Noticee also contributed to the 13.64 % of the volume in the market in said contract.
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Source: SecMarx — sebi:Order/PR/KD/2021-22/14431. 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.