sebi:Order/VV/NK/2021-22/13276
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Facts / Headnote
Violation established; penalty of Rs. 5,00,000 imposed under Section 15HA of SEBI Act
Provisions invoked
- s. 15
- s. 19
- s. 15H
- s. 15I
- s. 15J
- s. 15F
- s. 28A
- s. 15I(1)
Regulations
- Reg. 3
- Reg. 3(a)
- Reg. 6(1)(c)
Parties
- Vinay Ramanlal Shah HUF
Holding
The Noticee violated Regulations 3(a), (b), (c), (d), 4(1) and 4(2)(a) of PFUTP Regulations by executing 116 non-genuine reversal trades creating artificial volume of 1,25,98,000 units in 14 stock option contracts and is liable to monetary penalty of Rs. 5,00,000 under Section 15HA of SEBI Act.
Full text
Page 2 of 19 (hereinafter referred to as the “Noticee”) was one of the various entities which indulged in execution of reversal trades in stock options segment of BSE during the Investigation Period. Such trades were observed to be non-genuine in nature and created false or misleading appearance of trading in terms of artificial volumes in stock options and therefore alleged to be manipulative, deceptive in nature. In view of the same, SEBI initiated adjudication proceedings against the Noticee for violation of the provisions of Regulations 3(a), (b), (c), (d), 4(1) and 4(2)(a) of SEBI (Prohibition of Fraudulent and Unfair Trade Practices) Regulations, 2003 (hereinafter referred to as “PFUTP Regulations”).
Page 3 of 19 5. It was inter alia alleged in the SCN that the Noticee, through its trades, had indulged in creation of artificial volume of 1,25,98,000 units through 116 non- genuine trades in 14 stock option contracts during IP.
Page 4 of 19 (a) At the outset, we deny each and every allegation, averment and contention contained in the Show Cause Notice which is contrary to and/or inconsistent with what is stated herein. Nothing stated in the Show Cause Notice shall be deemed to have been admitted by us for reasons of specific non-traverse. (b) At the further outset, we are bonafide traders associated with the securities market. We have been dealing in various segments of securities market as per the advice of our brokers. We were introduced to the derivative segment (particularly the option segment) of the securities market through our broker. We were explained that though option trading was indeed risky in nature, the risk was limited to the amount of premium only and the profits, if any, would be unlimited. It is on this understanding that we participated in trading in this segment. (c) The Show Cause Notice inadvertently records ‘14 contracts’ in which this Noticee has traded in. Pertinently, there were 14 scrips but only ‘9 contracts’ executed by the Noticee during the investigation period i.e., in 2014-2015. (d) All trades conducted by us were 'saudas" carried out by our brokers as per the broker’s own tips. Pertinently, being a senior citizen and businessman, the karta had no time to actively follow the stock market. The karta had thus instructed the brokers to carry on trading for us as per the brokers own tips received from various sources to the extent of a particular monetary limit which wa
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Source: SecMarx — sebi:Order/VV/NK/2021-22/13276. 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.