Sebi slaps ₹ 20 lakh penalty on 4 entities for indulging in non-genuine trades

Synopsis
Capital markets regulator Sebi imposed penalties totaling Rs 20 lakh on four entities for conducting non-genuine trades in the illiquid stock options segment on BSE. Those fined include Nirman Chatha, Rajvardhan Foundation, Dinesh Kumar Agarwal HUF, and Pramod Kumar Jain for their manipulation of trading volumes through reversal trades during April 2014 to September 2015.

Mar 18, 2025

Capital markets regulator Sebi on Tuesday slapped penalties totalling Rs 20 lakh on four entities for indulging in non-genuine trades in the illiquid stock options segment on the BSE. In four separate orders, the regulator imposed a fine of Rs 5 lakh each on Nirman Chatha, Rajvardhan Foundation, Dinesh Kumar Agarwal HUF and Pramod Kumar Jain.

The orders came after the Securities and Exchange Board of India (Sebi) observed large-scale reversal of trades in the illiquid stock options segment of BSE, leading to the creation of artificial volume.

Thereafter, the markets watchdog conducted an investigation into the trading activities of certain entities in illiquid stock options at BSE for the period April 2014 to September 2015.

According to Sebi, reversal trades are those trades in which an entity reverses its buy or sell positions in a contract with a subsequent sell or buy position with the same counterparty.

These trades are alleged to be non-genuine trades as they lack basic trading rationale and allegedly lead to a false or misleading appearance of trading leading to the generation of artificial volume, the regulator said.

Accordingly, these entities are to be fined who indulged in reversal trades, the regulator said in the four separate orders.

On Thursday, Sebi had levied a fine of Rs 5 lakh each on Ravinder Kumar Jain, Ravi Bhatia and Sons HUF and Puran Chand Poddar HUF for indulging in non-genuine trades in the illiquid stock options segment on the BSE.>

[The Economic Times]