SEBI finds 81.40% of BSE stock option trades non-genuine

SEBI examined whether these actions violated regulations prohibiting fraudulent and unfair trade practices.

Who it concerns: Laxmi Chhugani (PAN: AAIPC9712B)

What SEBI found or ordered

• SEBI found that the Noticee executed 6 non-genuine trades in 2 stock option contracts resulting in an artificial volume of 8,60,000 units.
• SEBI determined that the Noticee violated Regulations 3(a), (b), (c), (d), 4(1), and 4(2)(a) of the SEBI (Prohibition of Fraudulent and Unfair Trade Practices Relating to Securities Market) Regulations, 2003.
• SEBI rejected the Noticee's defense that the trades were unauthorized or executed by the broker, citing a lack of supporting documents or complaints filed against the broker.
• The order notes that the Noticee did not avail of the SEBI ISO Settlement Schemes of 2022 or 2024.

Also in the document

• The investigation covered a broader period from April 1, 2014, to September 30, 2015, during which SEBI observed that 81.40% of all trades in the BSE stock options segment were allegedly non-genuine.
• The adjudication proceedings were initiated in 2021, with the final order issued in 2026, indicating a prolonged regulatory process.
• SEBI cited the Supreme Court judgment in SEBI Vs Bhavesh Pabari to support the view that regulatory powers must be exercised within a reasonable time when no specific limitation period is prescribed.