SEBI finds 7 non-genuine trades creating 9,32,000 unit artificial volume

SEBI examined whether the company executed non-genuine reversal trades that created artificial volume, violating regulations against fraudulent and unfair trade practices.

Who it concerns: S K Garments Private Limited (PAN: AALCS3830L)

What SEBI found or ordered

• SEBI found that the Noticee executed 7 non-genuine trades in 3 stock option contracts, resulting in an artificial volume of 9,32,000 units.
• SEBI alleged 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 Noticee was offered the SEBI Settlement Scheme, 2022, and later the SEBI ISO Settlement Scheme, 2024, but did not avail either opportunity.
• The Noticee failed to respond to the Show Cause Notice or attend hearings, leading SEBI to proceed ex-parte and presume the allegations were admitted.
• The order notes that the Noticee was one of 14,720 entities identified by SEBI as involved in non-genuine trades in the BSE stock options segment during the investigation period.

Also in the document

• SEBI noted that the Noticee was granted two opportunities to settle the matter under different schemes but declined both.
• SEBI cited a Supreme Court precedent (SEBI Vs Bhavesh Pabari) regarding the lack of prescribed timelines for identifying non-genuine trades.
• The adjudication was conducted ex-parte because the Noticee did not respond to service attempts via email, SPAD, or public notice.