Sebi slaps Rs 1.05 cr fine on Xion Gems & Jewellers for fraudulent trading activities

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April 30, 2021 7:19 PM

This pattern of trades continued for six days. Hence, it can be said that it was repetitive in nature, Sebi said.

The regulator had conducted an investigation into the trading activity in illiquid stock options on the BSE for the period from April 1, 2014 to September 30, 2015.The regulator had conducted an investigation into the trading activity in illiquid stock options on the BSE for the period from April 1, 2014 to September 30, 2015.

Sebi on Friday imposed a fine of Rs 1.05 crore on Xion Gems & Jewellers Pvt Ltd for indulging in fraudulent trading activities in the illiquid stock options segment on the BSE.

The regulator had conducted an investigation into the trading activity in illiquid stock options on the BSE for the period from April 1, 2014 to September 30, 2015.

It was found that Xion had executed non-genuine trades in 682 contracts, wherein it executed total 1,646 non-genuine trades, that resulted in artificial volumes of total 71,645,000 units.

These non-genuine trades executed by Xion in the contracts had significant differential in buy rates and sell rates considering that the trades were reversed on same day and with the same counterparty, the regulator said in an order.

This pattern of trades continued for six days. Hence, it can be said that it was repetitive in nature, Sebi said.

Therefore, the entity had indulged in execution of reversal trades in stock options with same entities on the same day, which are non-genuine in nature and had created false or misleading appearance of trading in terms of artificial volumes, it added.

By indulging in such activities, the entity had violated the provision of the PFUTP (Prohibition of Fraudulent and Unfair Trade Practices) norms.

Through four separate orders passed on Friday, the regulator levied a total penalty of Rs 23.2 lakh on two individuals and two entities for indulging in fraudulent trading in illiquid stock options on the BSE.

A fine of Rs 5 lakh each has been slapped on Sandeep Chhabra and Sanjay Chhabra.

Besides, a penalty of Rs 7.8 lakh and Rs 5.4 lakh has been imposed on OPG Securities Pvt Ltd and Tulshyan Metals Pvt Ltd, respectively.

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