SEBI finds 4 non-genuine trades in illiquid stock options

It details the procedural history and the Adjudicating Officer's determination of violations under the PFUTP Regulations.

Who it concerns: Ararti Karmakar (PAN: BYKPK3038D); Sargam Lefins Pvt Ltd (identified as counterparty); Bombay Stock Exchange (BSE); SEBI

What SEBI found or ordered

• SEBI found that the Noticee executed 4 non-genuine trades in 2 stock option contracts (FEDB15MAR140.00PE and GRSM15MAR3850.00CE).
• These trades resulted in the creation of artificial volume totaling 2,71,750 units.
• The Adjudicating Officer proceeded ex-parte, presuming the allegations were admitted because the Noticee did not respond to the Show Cause Notice or appear for hearings.
• The order cites violations of 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.
• The investigation period covered April 01, 2014, to September 30, 2015.

Also in the document

• SEBI noted that the Noticee's trades were executed with the same counterparty (Sargam Lefins Pvt Ltd) within seconds of each other on the same day, with significant price differences (e.g., buying at Rs 1 and selling at Rs 19).
• The order notes that the Noticee's artificial volume contributed 6.38% to 9.2% of the total market volume in the specific contracts involved.
• The Adjudicating Officer noted that multiple attempts to serve notices and hearing invitations were undelivered or the Noticee was unreachable, leading to the ex-parte decision.