sebi:Order/VV/JR/2020-21/7766
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Facts / Headnote
Noticee found to have violated PFUTP Regulations; penalty proceedings under Section 15HA of SEBI Act
Provisions invoked
- s. 15
- s. 15H
- s. 15J
- s. 28A
Regulations
- Reg. 4
- Reg. 3
- Reg. 2
- Reg. 3(a)
Parties
- Topmost Commercial Private Limited
Holding
The Noticee, Topmost Commercial Private Limited, was held to have indulged in creating artificial volume of 7,03,44,990 units through 645 non-genuine reversal trades in 192 stock option contracts on BSE, in violation of Regulations 3(a)-(d) and 4(1), 4(2)(a) of the PFUTP Regulations.
Full text
In the matter of dealings in Illiquid Stock Options at BSE Page 2 of 21 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 21 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 21 8. In order to comply with the principles of natural justice, opportunities of personal hearing was given to the Noticee on January 15, 2019 and February 11, 2019 by the erstwhile Adjudicating Officer. However, the notices returned undelivered and no one appeared on the scheduled date. After the matter was transferred to the undersigned, final opportunity of personal hearing was given to the Noticee on January 9, 2020 vide digitally signed email dated December 13, 2019. The said hearing was rescheduled to January 9, 2020. However, no one appeared on the scheduled date of hearing.
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Source: SecMarx — sebi:Order/VV/JR/2020-21/7766. 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.