BSE stock options: Sebi slaps Rs 50 lakh penalty on broker for fraud

Markets regulator Sebi has slapped a penalty of Rs 5000000 on broker Mangal Mantri Trading for indulging in fraudulent trade practices in illiquid stock options on BSE After observing a large-scale reversal of trades in the bourse's stock options segment, Sebi conducted a probe into the trading activity in illiquid stock options on the BSE from April 2014 to September 2015.From the trading pattern, Sebi noted that 81.38% of all the trades executed in stock options of the exchange were non-genuine and Mangal Mantri Trading was among the entities that executed manipulative reversal trades, thereby creating misleading impression of trading.By engaging in such trades, the firm violated PFUTP (Prohibition of Fraudulent and Unfair Trade Practices) regulations, the Securities and Exchange Board of India (Sebi) said in an order dated March 29.The fact that the entity was a broker makes this act a very serious violation, warranting a higher penalty, the regulator noted.Accordingly, a penalty of Rs 5000000 was imposed on the firm.The orders are in accordance with Sebi's announcement in April 2018 to take action in a phased manner against 14,720 entities for fraudulent trade in the illiquid stock options segment.Chandrakant Tibrawalla, Umang Kamlesh Vora, Wealthsmith Share Broking Private Limited among others are the entities facing action by Sebi.