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NEW DELHI: Capital markets regulator Sebi on Tuesday slapped penalties totalling Rs 25 lakh on five entities for indulging in non-genuine trades in the illiquid stock options segment on BSE.
The regulator imposed a fine of Rs 5 lakh each on Chitrabai Vasantrao Nikam, Damayanti Jhunjhunwala, Nemichand Kasturchand Jain, Naresh Kumar Agarwal and Chandra Lakshmi Safety Glass Ltd (CLSG).
Sebi had observed large scale reversal trades in illiquid stock options segment on BSE, leading to artificial volumes on the exchange. The regulator conducted an investigation into the trading activities of certain entities engaged in the segment from April 2014 to September 2015.
The five entities that have been fined on Tuesday were among those who indulged in the execution of reversal trades.
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.
By indulging in these acts, the entities violated the PFUTP (Prohibition of Fraudulent and Unfair Trade Practices) norms.
In a separate order, the regulator barred Uday Intellicall Pvt Ltd and its directors from the securities market for six months for providing unauthorised investment advisory services.
They have also been asked to refund investors’ money ‘jointly and severally’ collected through such services within three months.
Rajat Sarraf and Kalpana Jain were the directors of Uday Intellicall.
As per Sebi, Uday Intellicall was engaged in investment advisory services without holding the mandatory certificate of registration by the markets watchdog.
The regulator also noted that Sarraf and Jain being the directors and shareholders of the firm were also the beneficiaries of the unregistered investment advisory services offered in the name of the firm, thereby violating the provisions of Investment Advisers (IA) rules.
Uday Intellicall had received Rs 1.06 crore in their accounts from March 2018 till date through unregistered investment advisory services, Sebi said.
The regulator imposed a fine of Rs 5 lakh each on Chitrabai Vasantrao Nikam, Damayanti Jhunjhunwala, Nemichand Kasturchand Jain, Naresh Kumar Agarwal and Chandra Lakshmi Safety Glass Ltd (CLSG).
Sebi had observed large scale reversal trades in illiquid stock options segment on BSE, leading to artificial volumes on the exchange. The regulator conducted an investigation into the trading activities of certain entities engaged in the segment from April 2014 to September 2015.
The five entities that have been fined on Tuesday were among those who indulged in the execution of reversal trades.
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.
By indulging in these acts, the entities violated the PFUTP (Prohibition of Fraudulent and Unfair Trade Practices) norms.
In a separate order, the regulator barred Uday Intellicall Pvt Ltd and its directors from the securities market for six months for providing unauthorised investment advisory services.
They have also been asked to refund investors’ money ‘jointly and severally’ collected through such services within three months.
Rajat Sarraf and Kalpana Jain were the directors of Uday Intellicall.
As per Sebi, Uday Intellicall was engaged in investment advisory services without holding the mandatory certificate of registration by the markets watchdog.
The regulator also noted that Sarraf and Jain being the directors and shareholders of the firm were also the beneficiaries of the unregistered investment advisory services offered in the name of the firm, thereby violating the provisions of Investment Advisers (IA) rules.
Uday Intellicall had received Rs 1.06 crore in their accounts from March 2018 till date through unregistered investment advisory services, Sebi said.
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