SEBI levies Rs 50 lakh fine on 5 entities, also bans them from securities market

The Securities and Exchange Board of India (SEBI) on October 20 imposed a total fine of Rs 50 lakh on three entities and two individuals, besides restraining them from accessing the securities markets for one year, for indulging in fraudulent trading in the scrip of Asian Granito India.

They are facing a fine of Rs 10 lakh each for violating the Prohibition of Fraudulent and Unfair Trade Practices norms. The entities are Pasha Finance, Pat Financial Consultant and Hridaynath Consultancy, while the individuals facing penalty are Minal Bharat Patel and Ruchit Bharat Patel.

The markets regulator in its investigation noted the offenders repeatedly executed synchronised trades and created a misleading appearance of trading in the scrip without any intention of change in ownership of the security.

"The Noticees have indulged into synchronised trading by repeatedly placing orders among themselves at the same time (with hardly a difference of a second) and that too the order quantity and price of the buyer is matched with the same amount of order quantity and price of the seller without any partial order execution or order modification," SEBI noted.

Such synchronised trades constituted 18.55 percent of the market volume on the BSE and 7.96 percent of market volume on the National Stock Exchange (NSE) during the investigation period.
The investigation was conducted between December 2011 and October 2014.