SEBI shows red eye against 14720 entities for ‘non-genuine trades’

NewsBharati    08-Apr-2018
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New Delhi, April 8: Capital market regulator SEBI has decided to take action against 14700 companies who have traded incorrectly. SEBI has decided to take action on about 14,700 companies, who are doing wrong business while not following rules in the illiquid Stock Option Segment. SEBI has said that strict action will be taken against such companies.

According to SEBI, action will be taken against 567 companies in the first phase. SEBI is investigating in the context of 59 companies that whether these companies violated the rules related to fraudulent trading activities between April 1, 2014, and March 31, 2015.

Upon analysis of the trading activity of these entities, SEBI observed that the scheme, plan, device, and artifice employed in executing reversal trades in illiquid stock option contracts at “irrational, unrealistic and unreasonable prices”, was prima-facie a fraud on the securities market in as much as it involved non-genuine or manipulative transactions in securities and misuse of the market.

Through an interim order in August 2015, SEBI had restrained the 59 entities from the securities markets till further directions. The interim directions were confirmed by other orders in July 2016 and August 2016 after providing “certain relaxations”.