sebi:Order/SBM/AK/2021-22/14663

SEBI · SEBI · 2021-07-27 · Suresh B Menon, Adjudicating Officer

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Facts / Headnote

Penalty imposed on Noticee for violation of PFUTP Regulations

Provisions invoked

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

Regulations

• Reg. 3
• Reg. 4(1)
• Reg. 3(a)

Parties

• Ankita Singh (Now known as Ms. Ankita Chowdhary)

Holding

The Noticee violated regulations 3(a), 4(1) and 4(2)(a) of the PFUTP Regulations, 2003 by executing synchronized reversal trades in illiquid stock options at BSE, and a penalty of Rs.5,00,000 was imposed under section 15HA of the SEBI Act.

Full text

___________________________________________________________________________ Adjudication order in respect of Ankita Singh in the matter of dealing in Illiquid Stock Options at BSE Page 2 of 12 and buy value of the transactions. It was therefore alleged that Noticee had executed the reversal trades, which were non-genuine in nature and have created false or misleading appearance of trading in terms of creation of artificial volume in the Stock Options segment at BSE and therefore, it is alleged that the Noticee has violated the provisions of regulations 3(a), (b), (c), (d) and regulation 4(1), 4(2) (a) of the SEBI (Prohibition of Fraudulent and Unfair Trade Practices relating to Securities Markets) Regulations, 2003 (hereinafter referred to as ‘PFUTP Regulations’). In view of the above reasons, adjudication proceedings have been initiated against the Noticee under the provisions of section 15 HA of the Securities and Exchange Board of India Act, 1992 (hereinafter referred to as ‘SEBI Act’). APPOINTMENT OF ADJUDICATING OFFICER

___________________________________________________________________________ Adjudication order in respect of Ankita Singh in the matter of dealing in Illiquid Stock Options at BSE Page 3 of 12 Date Buyer Seller Buy Order Time Sell Order Time Trade Time Trade Rate (Rs.) Trade Quantity 25/03/2015 ANKITA SINGH PAWAN KUMAR JHUNJHUNWALA 13:39:18.860500 13:39:18.811454 13:39:18.860500 15 18500 25/03/2015 PAWAN KUMAR JHUNJHUNWALA ANKITA SINGH 13:39:21.711629 13:39:21.762722 13:39:21.762722 25 18500

___________________________________________________________________________ Adjudication order in respect of Ankita Singh in the matter of dealing in Illiquid Stock Options at BSE Page 4 of 12 a. The Noticee submitted that, the proceedings are conducted in complete violation of natural justice, in so far as: (i) the Investigation report, entire set of documents, material facts and other details has not been furnished. (ii) SCN has been issued after a long and inordinate delay. b. The trades executed were in the stock option segment of the BSE Ltd. The trades were genuine and executed on the platform provided by the stock exchange in normal course of business. The Noticee was not involved in creation of any artificial volume or misleading appearance. c. The alleged trades have all traits of being genuine and therefore cannot be categorised as non-genuine. These trades were executed on the anonymous platform of the Exchange, without any knowledge of counter party, at price ranges that were permitted by the Exchange and SEBI and the obligation arising out of it have been settled through the clearing mechanism of the Exchange. The trades did not cause loss to investors. d. The notice was unaware of the counterparty and has no connection or relationship with the counterparty. There was no meeting of minds or collusion. Synchronization not ipso facto illegal. e. Rule of preponderance of probability cannot be exercised in absence of connection with counter party.

Source: SecMarx — sebi:Order/SBM/AK/2021-22/14663. 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.