Sebi slaps Rs 65 lakh fine on individual for fraudulent trading

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Published: July 10, 2019 9:24:50 PM

Reversal trades are those trades in which an entity reverses its buy or sell positions in a contract with subsequent sell or buy positions with the same counterparty during the same day.

Sebi, fraudulent trading, market news, BSE Markets regulator, market newsThe regulator noted that the individual, Deepakkumar Subhaschandra Mehta, was one of the various entities which indulged in execution of non-reversal trades in the segment. (Reuters)

Markets regulator Sebi Wednesday slapped a fine of Rs 65 lakh on an individual for indulging in fraudulent trading in the illiquid stock options segment at BSE. The order follows a probe conducted by Sebi between April 2014 and September 2015 after it observed that 81.38 per cent of all the trades executed in stock options segment of the bourse were non-genuine trades.

The regulator noted that the individual, Deepak kumar Subhaschandra Mehta, was one of the various entities which indulged in execution of non-reversal trades in the segment. Reversal trades are those trades in which an entity reverses its buy or sell positions in a contract with subsequent sell or buy positions with the same counterparty during the same day.

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The reversal trades were “non genuine trades as they were not executed in normal course of trading, lack basic trading rationale, and allegedly lead to false or misleading appearance of trading in terms of generation of artificial volume, hence were deceptive and manipulative,” Sebi said. The fraudulent and unfair trade practices of Mehta are in violation of PFUTP (Prohibition of Fraudulent and Unfair Trading Practices) norms.
Accordingly, a penalty of Rs 65 lakh has been levied on Deepakkumar Subhaschandra Mehta.

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