sebi:Order/SD/KS/2021-22/14518
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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. 15A
- s. 28A
Regulations
- Reg. 3
- Reg. 4(1)
- Reg. 3(a)
Parties
- Mr. Shubham Umesh Sharma
Holding
The Noticee, Mr. Shubham Umesh Sharma, 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, creating artificial volume of 200,000 units in one contract. A penalty of Rs. 5,00,000 was imposed 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 22 It was also observed that the aforesaid trades resulted into alleged creation of artificial 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 22 SHOW CAUSE NOTICE, HEARING AND REPLY
Adjudication Order in the matter of Dealings in Illiquid Stock Options at BSE Page 4 of 22 trades is 200000 comprising both volume of initial trade and volume of reversal trade, while not considering the volume which is not reversed. iii. It is further observed from the trade data of the Noticee that it has allegedly entered into non-genuine trades in 1 contract wherein he executed a total of 2 trades all of which were, prima facie, non-genuine trades. In view of this, it is alleged that such fraudulent trades of the Noticee had resulted into creation of artificial volume of total 200000 units. iv. From the perusal of the trade data of the alleged non-genuine trades of the Noticee, it is observed that Noticee has allegedly executed non-genuine trades in 1 contract. The total volume of 200000 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
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Source: SecMarx — sebi:Order/SD/KS/2021-22/14518. 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.