Sebi fines Rs50 lakh on 10 entities for non-genuine trades

A penalty of Rs5 lakh each was imposed on ten entities in ten separate orders. The ten entities are Auroplus Marketing Pvt Ltd, Baba Iron Industries, Atlantic Invest Advisory, Avinash V Mehta HUF, Navneet Agarwal and Sons HUF, Neeraj Gandhi HUF, Athwani Shrichand, Aviral Gupta, Ayushi Agarwal and Saloni Ruia.

The regulator had observed large-scale reversal trades in the illiquid stock options segment on BSE, leading to artificial volumes on the exchange.

The Sebi conducted a probe into the trading activities of certain entities engaged in the segment from April 2014 to September 2015.

By indulging in these acts, the entities violated the PFUTP (Prohibition of Fraudulent and Unfair Trade Practices) norms.

Reversal trades are alleged to be non-genuine in nature as they are executed in the normal course of trading, which leads to a false or misleading appearance of trading in terms of generating artificial volumes, the regulator said.

In a separate order on Wednesday, the Sebi cancelled the certificate of registration of Allied Financial Services for flouting regulatory norms.

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

(With inputs from agencies)