SEBI finds Prabhat executed 20 non-genuine reversal trades in 6 stock option contracts

Who it concerns: Prabhat (PAN: AAGFP1439C)

What SEBI found or ordered

• SEBI found that Prabhat executed 20 non-genuine reversal trades in 6 stock option contracts.
• These trades resulted in the creation of artificial volume totaling 1,64,84,000 units.
• The alleged violations occurred between April 01, 2014, and September 30, 2015.
• SEBI alleged violations of Regulations 3(a), (b), (c), (d), 4(1), and 4(2)(a) of the PFUTP Regulations, 2003.
• The Noticee did not respond to the Show Cause Notice or hearing notices, leading SEBI to proceed ex-parte and presume the allegations were admitted.
• The order cites the appointment of an Adjudicating Officer and references prior interim orders from 2015-2016 regarding the broader illiquid stock options matter.

Also in the document

• SEBI noted that the Noticee's artificial volume contributed between 9.56% and 100% of the total market volume in the specific contracts involved.
• The investigation revealed that 14,720 entities were involved in executing non-genuine trades in the BSE stock option segment during the investigation period.
• SEBI referenced a Supreme Court judgment (SEBI Vs Bhavesh Pabari) regarding the exercise of power within a reasonable time when no specific limitation period is prescribed.