sebi:Order/SD/KS/2021-22/14221

SEBI · SEBI · 2021-07-06 · Sandeep P Deore, Adjudicating Officer

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Facts / Headnote

Penalty imposed on Noticee

Provisions invoked

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

Regulations

• Reg. 3
• Reg. 4(1)
• Reg. 200
• Reg. 3(a)

Parties

• Shubham Rungta Beneficiary Trust

Holding

The Noticee, Shubham Rungta Beneficiary Trust, 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 illiquid stock options at BSE, and is liable for a penalty of Rs. 5,00,000 under Section 15HA of the SEBI Act.

Full text

Adjudication Order in the matter of Dealings in Illiquid Stock Options at BSE Page 2 of 19 volume to the tune of 826.21 crore units in the Stock Options segment of BSE during the investigation period. In view of the large scale reversal of trades that were observed in the illiquid Stock Options segment at BSE, it is alleged that these trades were non-genuine in nature.

Adjudication Order in the matter of Dealings in Illiquid Stock Options at BSE Page 3 of 19 4 of the Adjudication Rules requiring the Noticee to show cause as to why an inquiry should not be held against it and why penalty, if any, should not be imposed on the Noticee under the provisions of section 15HA of the SEBI Act. The SCN was sent to the Noticee vide Registered Post AD and was duly served on the Noticee as per the Tracking details obtained from the India Post website. The SCN issued to the Noticee, inter alia, mentioned the following-: i. It is noted that Noticee was one of the various entities which were indulged in execution of such alleged non-genuine trades in Stock Options Segment of BSE during the Investigation period. Following points deal with the dealings of Noticee during the Investigation period and allegations against it for execution of non-genuine trades. Date Buyer Seller Buy Order Time Sell Order Time Trade Time Trade Rate (Rs.) Trade Quantity 22/07/2015 NARAYAN KUMAR GOYAL (HUF) SHUBHAM RUNGTA BENEFICIARY TRUST 12:16:16.458849 12:12:53.535958 12:16:16.458849 3.4 60000 22/07/2015 SHUBHAM RUNGTA BENEFICIARY TRUST NARAYAN KUMAR GOYAL (HUF) 12:39:51.121881 12:39:51.043812 12:39:51.121881 0.15 60000

Adjudication Order in the matter of Dealings in Illiquid Stock Options at BSE Page 4 of 19 of 120000 units generated by the Noticee in this 1 contract. Due to its alleged non-genuine trades, an Artificial Volume was generated by the Noticee in the Stock Option Segment of BSE. These alleged non-genuine trades, executed by Noticee in above contract, had significant differential in buy rates and sell rates considering that the trades were reversed on same day v. In view of the foregoing, it is alleged that the Noticee, by indulging in execution of reversal trades in Stock Options with same entities on the same day, which were non-genuine in nature, has created false or misleading appearance of trading in the aforementioned contracts traded in the option segment of BSE. In view of the fact that these options contracts were illiquid in nature, having very small volume in trading, the Noticee allegedly created artificial volumes in stock options which was manipulative and deceptive in nature. Therefore, in view of above, it is alleged that the Noticee has violated Regulation 3(a), (b), (c), (d), 4(1) and 4(2)(a) of PFUTP Regulations, 2003

Source: SecMarx — sebi:Order/SD/KS/2021-22/14221. 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.