Sebi slaps Rs 50 lakh fine on 10 firms for indulging in non-genuine trades

Capital markets regulator Sebi on Wednesday imposed fines totaling Rs 50,000 on ten entities for engaging in fraudulent trades in BSE’s illiquid stock options segment.

In ten separate orders, the regulator imposed a fine of Rs 5,000 each on Auroplus Marketing Pvt Ltd, Baba Iron Industries, Atlantic Invest Advisory, Avinash V Mehta HUF, Navneet Agarwal and Sons HUF, Neeraj Gandhi HUF and Athwani Shrichand.

Aviral Gupta, Ayoshi Agarwal and Saloni Roya were also sanctioned by the markets watchdog.

The Securities and Exchange Board of India (SEBI) has noted widespread adverse trades in the illiquid stock options segment of BSE, which has led to artificial volumes on the exchange.

Subsequently, the regulator conducted an investigation into the business activities of some entities involved in the sector from April 2014 to September 2015.

These 10 entities fined on Wednesday were among those who indulged in the execution of reverse trades.

The regulator said that the reverse trades are allegedly inauthentic in nature as they are executed in the normal course of trading, giving rise to a false or misleading appearance of the trade in terms of generating artificial volumes.

By indulging in these acts, the entities have violated the rules of PFUTP (Prohibition of Fraudulent and Unfair Business Practices).

In a separate order, the markets watchdog revoked Allied Financial Services’ registration certificate for breach of regulation.

Allied Financial Services Pvt Ltd (AFSPL) was a registered member of the NSE as well as a depository participant in the NSDL (National Securities Depository Ltd).