Sebi slaps Rs 25 lakh penalty on 5 entities for non-genuine trades


NEW DELHI: Capital markets regulator Sebi on Tuesday fined five companies a total of Rs.25 lakh for engaging in spurious trading in the illiquid stock options segment of the BSE.
The regulator fined Chitrabai Vasantrao Nikam, Damayanti Jhunjhunwala, Nemichand Kasturchand Jain, Rs 5 lakh rupees each, Naresh Kumar Agarwal and Chandra lakshmi Safety Glass Ltd (CLSG).
Sebi had observed large-scale reversal trades in the illiquid stock option segment on the BSE, resulting in artificial volumes on the exchange. From April 2014 to September 2015, the regulator conducted an investigation into the trading activities of certain companies operating in this segment.
The five companies fined Tuesday were among those indulged in executing reverse trades.
Reversal trades are allegedly spurious as they are executed in the normal course of trading, giving the trade a false or misleading appearance in terms of generating artificial volume, the regulator said.
By doing so, the companies violated PFUTP (Prohibition of Fraudulent and Unfair Trade Practices) standards.
In a separate order, the regulatory authority banned this uday Intellicall Pvt Ltd and its directors have been banned from the securities market for six months for providing unauthorized investment advisory services.
They were also asked to “jointly and severally” return investors’ money raised through such services within three months.
Rajat Sarraf and Kalpana Jain were the directors of Uday Intellicall.
According to Sebi, Uday Intellicall was engaged in investment advice without having the mandatory registration certificate from the market regulator.
The regulator also found that Sarraf and Jain, as directors and shareholders of the company, were also beneficiaries of the unregistered investment advisory services offered on behalf of the company, in violation of the provisions of the Investment Advisers (IA) Rules.
Uday Intellicall has received 1.06 crore in its accounts from March 2018 to date through unregistered investment advisory services, Sebi said.

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