sebi:Order/VV/JR/2019-20/5826
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Facts / Headnote
Penalty of Rs. 5,00,000 imposed for violation of PFUTP Regulations
Provisions invoked
- s. 15
- s. 15H
- s. 15J
- s. 28A
Regulations
- Reg. 4
- Reg. 3
- Reg. 2
- Reg. 3(a)
Parties
- Yogesh Himatlal Patel
Holding
The Noticee violated Regulations 3(a), (b), (c), (d) and 4(1), 4(2)(a) of PFUTP Regulations by executing non-genuine reversal trades in illiquid stock options at BSE creating artificial volume, and is liable to a monetary penalty of Rs. 5,00,000 under Section 15HA of the SEBI Act.
Full text
In the matter of dealings in Illiquid Stock Options at BSE Page 2 of 14 2. SEBI conducted an investigation into the trading activities of certain entities in ISO, BSE for period April 1, 2014 to September 30, 2015 (hereinafter referred to as “Investigation Period”/IP”). Pursuant to investigation, it was observed that during IP, total 2,91,643 trades comprising substantial 81.38% of all the trades executed in Stock Options of BSE were non-genuine trades. The aforesaid non-genuine trades resulted in 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 also noted that said non-genuine trades were not restricted to any specific contract or between any specific set of entities.
In the matter of dealings in Illiquid Stock Options at BSE Page 3 of 14 4. In view of the foregoing, it was alleged that the Noticee has entered into reversal trades in BSE ISO and these reversal trades were non-genuine in nature and have created false and misleading appearance of trading in terms of artificial volume in Stock Options and therefore alleged to be manipulative, deceptive in nature. The Noticee was alleged to have violated regulations 3(a), (b), (c) and (d), 4(1), 4(2)(a) of SEBI (Prohibition of Fraudulent and Unfair Trade Practices Relating to Securities Market) Regulations, 2003 (hereinafter referred to as “PFUTP Regulations”).
In the matter of dealings in Illiquid Stock Options at BSE Page 4 of 14 letter dated May 14, 2019. The notice returned undelivered. However, no one appeared on the scheduled date. The undersigned gave an opportunity of personal hearing to the Noticee on October 10, 2019 vide notice dated September 20, 2019. Although it was delivered, no one appeared on the scheduled date. Final opportunity of personal hearing was given to the Noticee on November 14, 2019. No one appeared on the scheduled date of hearing.
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Source: SecMarx — sebi:Order/VV/JR/2019-20/5826. 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.