Capital markets regulator Sebi on Thursday levied a penalty of over Rs 13.5 lakh on Anand Mining Corporation for indulging in fraudulent trading in the illiquid stock options segment on the BSE. The markets regulator conducted a probe in the stock options segment from April 2014 to September 2015 after it observed large scale reversal of trades that led to creation of artificial volume. Sebi noted that Anand Mining Corporation was one of the several entities which indulged in execution of non-genuine trades by executing reversal trades in the stock options segment. Reversal trades are those trades in which an entity reverses its buy or sell positions in a contract with subsequent sell or buy position with the same counterparty during the same day.
"The consistent pattern of dealings by noticee only in such options contracts which are illiquid clearly demonstrates the manipulative intent to use stock exchange platform to carry out non-genuine trades," Sebi said. It further added that "it cannot be ignored that synchronization of trades in pre-determined manner had an adverse impact on the fairness, integrity and transparency in the securities market." By doing so, the firm has violated the provisions of the Prohibition of Fraudulent and Unfair Trade Practices norms, the order noted. In a separate order, Sebi imposed a fine of Rs 5 lakh on stock broker Bhaijee Commodities Pvt Ltd for violating the regulator's circular that mandates strict segregation of clients' funds and securities from own funds and securities.