July 16, 2019

Capital Market Regulator Securities And Exchange Board Of India Fines GKS Properties Rs 5 Lakh For Fraudulent Trades

[ By Bobby Anthony ]


Capital markets regulator Securities & Exchange Board of India (SEBI) has imposed a fine of Rs 5 lakh on GKS Properties for executing non-genuine trades in the illiquid stock options segment at the Bombay Stock Exchange (BSE).

Incidentally, the ruling has come after an investigation conducted by SEBI in the stock options segment of the bourse between April 2014 and September 2015.

It may be recalled that during the course of its investigation, SEBI had noted that 81.38% of all trades executed were ones which involved reversal of buy and sell positions by clients and counterparties in a contract on the same day, which had created artificial volume in the stock options segment.

SEBI had stated in an order dated July 15 that GKS Properties was one of such entities which had executed reversal of trades.

The capital markets regulator had mentioned that these were non-genuine and deceptive transactions which are covered under the definition of fraud.

The regulator had also stated that by indulging in manipulative trade practices, the company had violated Prohibition of Fraudulent and Unfair Trade Practices regulations.

Such persistent trading patterns which were found to be fraudulent and deceptive tends to affect the normal price discovery mechanism in the securities market, the regulator had stated.

The regulator had stated that entities which indulge in manipulative, fraudulent and deceptive transactions, or abet carrying out such transactions ought to be suitably penalized for such acts of omissions and commissions.

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