Mumbai: The Securities and Exchange Board of India, or Sebi, on Wednesday imposed a penalty of Rs15 lakh on Indiabulls Securities Ltd for violating trading norms in the futures and options (F&O) segment between January and March 2007.
The brokerage had “aided and abetted its clients in synchronized/matched/reversal trades” that were in violation of the regulations, D. Ravi Kumar, Sebi’s chief general manager and adjudicating officer, said in an order.
“It is pertinent to note that the trades were reversed in many cases in a matter of just a few seconds/minutes showing significant differences between the buy and sell trade prices. The change in positions took place without any significant change in the price of the underlying. Hence, the genuineness of the trades is questionable,” Sebi said in its order.
Strict mode: Sebi chairman C.B. Bhave. Abhijit Bhatlekar / Mint
In a notice to Indiabulls Securities in October 2007, the market watchdog had alleged that the firm as a stockbroker had executed “non-genuine transactions in collusion with certain clients and brokers in the F&O segment”.
In its reply, the brokerage firm denied it violated any norms and said none of its group companies was involved in any fake trading or price fixing in the segment.
In an unrelated case, Sebi had charged Indiabulls Securities with cornering shares meant for retail investors in initial public offerings (IPOs) but absolved the brokerage in December 2007.