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SEBI imposes Rs 36 lakh fine on 7 companies

Yatheendradas C.k. at 06:24 AM - May 02, 2019 ( ) Views: 95

SEBI imposes Rs 36 lakh fine on 7 companies; here’s why
By: FE Online | Published: May 1, 2019 7:16:35 PM
SEBI levied a fine of Rs 36 lakh on seven firms on Wednesday for manipulative and fraudulent trade activities in illiquid stock options of BSE.

SEBI levied a fine of Rs 36 lakh on seven firms on Wednesday for manipulative and fraudulent trade activities in illiquid stock options of BSE. An investigation was carried out into the  trading activity in illiquid stock options on BSE from April 2014 to September 2015 by the market regulator. The probe was conducted after observing large-scale reversal of trades in the stock options segment of the exchange.

While firms Varun Vinimay Pvt Ltd, Shri Balaji Trade, Leela News Network Pvt Ltd, Maa Amba Towers Ltd, Bermaco Energy System and Calendula Teledata were imposed a fine Rs 5 lakh each. Maa Ambe Warehousing Pvt Ltd was fined Rs 6 lakh, SEBI orders revealed.

SEBI observed in the investigation, that of 2.91 lakh trades, that comprised mover 80 per cent of all the trades executed were non-genuine.

The entities violated PFUTP (Prohibition of Fraudulent and Unfair Trading Practices) regulations, SEBI said.

Sebi said “act of noticee was deceitful and misleading to other unsuspecting investors, and amounts to manipulation of volume in these contracts…. noticee created a misleading impression of trading in said stock option contracts in a fraudulent manner.”

On Tuesday, SEBI had barred National Stock Exchange (NSE) from the securities market for 6 months. The regulator also asked NSE to disgorge Rs 625 crore with 12 percent per annum interest in the co-location case.

SEBI also ordered that the exchange couldn’t access the capital market for launching initial public offering (IPO) for six months. The exchange did not exercise due diligence while putting in place TBT (Tick-by-Tick) architecture, SEBI had said in the order. The amount to be collected would be deposited in the Investor Protection and Education Fund (IPEF), SEBI said.


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