sebi:Order/PR/PC/2021-22/14105
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Facts / Headnote
Penalty imposed on the Noticee 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
- Bina Mundhra (PAN: AEKPM8230L)
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 at 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 15 stock options at BSE for the period April 1, 2014 to September 30, 2015 (hereinafter referred to as "IP"). 2. Pursuant to investigation, it was observed that a total of 2,91,744 trades comprising a 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 Bina Mundhra (PAN- AEKPM8230L) (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 15 APPOINTMENT OF ADJUDICATING OFFICER 3. I was appointed as the Adjudicating Officer in the matter, conveyed vide communique dated July 06, 2021, under section 19 read with section 15 I(1) of the SEBI Act, 1992 (hereinafter referred to as “SEBI Act, 1992”) and rule 3 of SEBI (Procedure for Holding Inquiry and Imposing Penalties) Rules, 1995 (hereinafter referred to as “Adjudication Rules”) to conduct adjudication proceedings 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 leviable, impose such penalty as deemed fit in terms of rule 5 of Adjudication Rules and section 15HA of SEBI Act, 1992.
Page 4 of 15 S. No. Contract Name Avg. Buy Rate(R s.) Total Buy Volume (no. of Units) Avg. sell rate (Rs.) Total Sell Volume (no. of units) % 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 ANBK15JUN85.00PE 9 100000 11.5 100000 100 100
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Source: SecMarx — sebi:Order/PR/PC/2021-22/14105. 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.