Sebi fines 3 entities for fraudulent trading in stock options
V S G Leasing and Finance, Himadri Steel and Gyandeep Khemka are the entities fined by the regulator after it found reversal of trades in illiquid stock options segment on BSE that led to creation of artificial volume, as per Sebi's orders.
The orders follow a probe conducted by the regulator in the stock options segment of the BSE from April 2014 to September 2015.
The probe found that over 2.91 lakh trades, or 81 per cent of all the trades executed in stock options segment of BSE, involved reversal of buy and sell positions by the clients and counterparties in a contract and these trades created alleged artificial volume in the segment.
Sebi observed that the three entities, among others, had indulged in execution of reversal trades in stock options with same counterparties on the same day which were non-genuine in nature and created a false or misleading appearance of trading and violated PFUTP(Prohibition of Fraudulent and Unfair Trade Practices) regulations, the markets watchdog said in three separate orders.
Reversal trades are those trades in which an entity reverses its buy or sell positions in a contract with subsequent sell or buy position with the same counterparty during the same day.As per its findings, the Securities and Exchange Board of India (Sebi) levied a fine of Rs 5 lakh each on V S G Leasing and Finance, Himadri Steel and Gyandeep Khemka. AST SP RVK
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