Illiquid stock options segment: 4 entities settle cases with Sebi

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Illiquid stock options segment: 4 entities settle cases with Sebi


NEW DELHI: Markets regulator Sebi on Thursday disposed of adjudication proceedings against four entities after they settled cases related to alleged fraudulent trading activities in the illiquid stock options segment of the BSE on payment of Rs 90 lakh towards settlement charges.

Those who have settled the cases are Umang Mahendra Shah, Ushma Sheth, TLB Trading Ventures and Tradebulls Securities Pvt Ltd, according to four separate settlement orders passed by Sebi.

In its order, Securities and Exchange Board of India (Sebi) said it observed large scale reversal of trades in the stock options segment of BSE leading to creation of artificial volume.

Pursuant to the same, the regulator initiated an investigation into the trading activities of certain entities in the illiquid stock options at BSE for the period April 1, 2014 to September 30, 2015.

During the course of investigation, Sebi found that the four entities were allegedly indulged in non-genuine trades and created a false and misleading appearance of trading in the stock options segment.

These allegedly resulted into violation of provisions of the Prohibition of Fraudulent and Unfair Trade Practices (PFUTP) Regulations and in view of this, Sebi initiated adjudication proceedings and issued show-cause notices to them.

During the course of proceedings, the entities filed application for settlement with Sebi.

In January this year, Sebi passed an order under its settlement scheme in respect of 1,018 entities including four entities, for settlement of proceedings initiated for defaults.

Consequently, Sebi in orders passed on Thursday said that no further inquiry was required in the present matters and the show cause notices issued to the five entities has been disposed of accordingly.

Individually, Umang Mahendra Shah paid Rs 30.22 lakh towards settlement charges, Ushma Sheth paid Rs 24.02 lakh, TLB Trading Ventures remitted Rs 20.92 lakh and Tradebulls Securities paid Rs 14.72 lakh.





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