Markets regulator Sebi levied a total fine of over Rs 26 lakh on four entities for indulging in unfair trade practices in the illiquid stock options segment on the BSE.
The firms facing penalty are GKS Technology Park Pvt Ltd, Femina Stock Management, Sagar Constructions and SPFL Securities Ltd.
Sebi had initiated adjudication proceedings between April 2014 and September 2015 after observing large scale reversal of trades by various entities in the stock options segment of the BSE.
Investigation revealed that the firms were among the various entities involved in reversal of buy and sell positions by the clients and counterparties in a contract.
The reversal trades of the firms involved squaring off open positions with a significant difference without any basis for such change in the contract price and led to generation of artificial volumes, Sebi noted.
“The trading behaviour of the Noticee confirms that such trades were not normal and wide variation in prices of the trades in the same contract in a short time without any basis for such wide variation, all indicate that the trades executed by the Noticee were not genuine trades,” Sebi said in four similarly worded orders.
The acts of the entities are in violation of provisions of Prohibition of Fraudulent and Unfair Trading Practices (PFUTP) regulations, Sebi said.
Accordingly, SPFL Securities has been fined Rs 11.8 lakh while GKS Technology Park, Femina Stock Management and Sagar Constructions have been fined Rs 5 lakh each.