Case Law Details
SEBI conducted an investigation into the trading activities of certain entities in Illiquid Stock Options at BSE for the period April 1, 2014 to September 30, 2015.
It was observed that during the investigation period, total 2,91,643 trades comprising substantial 81.38% of all the trades executed in Stock Options Segment of BSE were found to be non-genuine trades. The aforesaid non-genuine trades resulted into creation of artificial volume to the tune of 826.21 Crore units or 54.68% of the total market volume in Stock Options segment of BSE during the investigation period.
It was observed that the said non- genuine trades were not restricted to any specific contract or between any specific set of entities. It was observed that Mr. Pradeep Kumar Kyan (hereinafter referred to as “Noticee”) was one of the various entities who were indulged in execution of non-genuine trades in Stock Options Segment of BSE during the investigation period. The following points narrate the dealings of the Noticee during the investigation period and the allegations against it for execution of non-genuine trades.
As regards to all the dealings of Noticee in the Stock Options segment of BSE during the Investigation Period, it was observed that the Noticee had traded in 34 unique contracts, from which it has allegedly executed non genuine trades in 34 contracts wherein it executed total 93 non-genuine trades, which resulted in artificial volume of total 121,34,836 units.
It is established that reversal trades are not normal transactions and it clearly demonstrates beyond reasonable doubt that the Noticee had intentionally executed these trades and manipulated the volume by artificial trading pattern in 34 contracts. Out of the 34 contracts, in respect of 1 contract, all the trades were non genuine trades, which contributed to 100% artificial volume.
Please become a Premium member. If you are already a Premium member, login here to access the full content.
Well done taxguru team.
The decision may be useful to many subscribers.
Narayan Jain, Advocate
[email protected]