sebi:Order/RM/RV/2021-22/14939

SEBI · SEBI · 2021-04-30 · Ram Rudra Murari, 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

Show Cause Notice dated 30.07.2021 not dropped; penalty imposed on the Noticee for engaging in non-genuine/reversal trades in illiquid stock options on BSE

Provisions invoked

• s. 15
• s. 15H
• s. 15J
• s. 11C
• s. 15F
• s. 28A

Regulations

• Reg. 3
• Reg. 4(1)
• Reg. 3(a)

Parties

• Manoj Agarwal

Holding

The Adjudicating Officer held that Manoj Agarwal executed non-genuine reversal trades in an illiquid stock option contract on BSE, generating artificial volume, in contravention of regulations 3(a),(b),(c),(d) and 4(1), 4(2)(a) of the PFUTP Regulations, 2003, and imposed a monetary penalty.

Full text

Adjudication Order in respect of Manoj Agarwal in the matter of dealings in Illiquid Stock Options at BSE Page 2 of 28 and sell positions by the clients and counterparties in a contract on the same day. It was observed that Mr. Manoj Agarwal (hereinafter referred to as “Noticee”) was one such client whose reversal trades involved squaring off open positions with a significant difference without any basis for such change in the contract price. The aforesaid reversal trades allegedly resulted into generation of artificial volumes, leading to allegations that the Noticee had violated the provisions of regulations 3(a),(b),(c),(d) and regulations 4(1),4(2)(a) of the SEBI (Prohibition of Fraudulent and Unfair Trading Practices related to Securities Markets) Regulations, 2003 (hereinafter referred to as “PFUTP Regulations, 2003”). APPOINTMENT OF ADJUDICATING OFFICER

Adjudication Order in respect of Manoj Agarwal in the matter of dealings in Illiquid Stock Options at BSE Page 3 of 28 “….

Adjudication Order in respect of Manoj Agarwal in the matter of dealings in Illiquid Stock Options at BSE Page 4 of 28 The abovementioned reversal trades and volumes are illustrated through the dealings of Noticee in one contract viz, “PNBK15JUN145.00CEW1” during the investigation period, as follows:-

Source: SecMarx — sebi:Order/RM/RV/2021-22/14939. 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.