sebi:Order/VV/VS/2021-22/12403
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Facts / Headnote
Violation established; penalty imposed
Provisions invoked
- s. 15
- s. 19
- s. 15H
- s. 15I
- s. 15J
- s. 15F
- s. 28A
- s. 15I(1)
Regulations
- Reg. 7
- Reg. 3
- Reg. 3(a)
Parties
- Radha Mohan Purshottam Das Jewels Pvt Ltd
Holding
The Noticee violated Regulations 3(a), (b), (c), (d), 4(1) and 4(2)(a) of the PFUTP Regulations by executing 417 non-genuine reversal trades in 142 BSE stock option contracts creating artificial volume of 1,86,10,862 units, and is liable to a monetary penalty of Rs. 16,50,000 under Section 15HA of the SEBI Act.
Full text
Page 2 of 20 Das Jewels Pvt Ltd (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 20 5. It was inter alia alleged in the SCN that the Noticee, through its trades, had indulged in creation of artificial volume of 1,86,10,862 units through 417 non- genuine trades in 142 stock option contracts during IP.
Page 4 of 20 8. The Noticee inter alia made the following submissions in its aforesaid written submissions: (a) The trades in question have all the traits of being genuine and therefore cannot be categorized as non-genuine. The said trades were executed on the anonymous platform of the Exchange, without any knowledge of counter party, at price ranges that were permitted by the Exchange and SEBI and the obligations arising out of it have been settled through the clearing mechanism of the Exchange. (b) Further, the reasons for trades being carried out at a substantial price difference and being reversed with the same party are also genuine as the RDD issued by SEBI envisages such a situation and also warns the investors and traders against them as it accepts that these are bound to happen. (c) The information displayed on ‘BOLT’ with respect to the alleged trades and trading history available in public domain, equally nurtures and meets with the requisitions of an investor wherein question of creation of artificial volume or misleading appearance does not arise at all. (d) Had the trades been non-genuine, the Noticee would have been related to the counter party. The SCN does not provide any evidence on the Noticee's relationship with the counter party. It is humbly submitted that the counter party is not related to the Noticee. (e) It is not the case that other investors have got carried away or have been misled due to the trades carried out by the Noticee. Further, there is no
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Source: SecMarx — sebi:Order/VV/VS/2021-22/12403. 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.