Description
SEBI adjudication order against Manoj Kumar Gupta for engaging in non-genuine reversal trades in BSE's illiquid stock options segment during 2014-2015.
Summary
SEBI issued an adjudication order against Manoj Kumar Gupta (PAN: ADVPG8770D) for engaging in manipulative trading practices in BSE’s Illiquid Stock Options segment. The order addresses non-genuine reversal trades that created artificial volume and false appearance of trading during April 2014 to September 2015.
Key Points
- Investigation covered large-scale reversal trades in BSE’s Illiquid Stock Options segment
- 2,91,744 trades (81.41% of all stock options trades) involved position reversals during investigation period
- 14,720 entities were involved in executing non-genuine trades
- Manoj Kumar Gupta was identified as one of the entities engaging in reversal trades
- Charges filed under SEBI (Prohibition of Fraudulent and Unfair Trade Practices) Regulations, 2003
Regulatory Changes
No new regulatory changes introduced. This is an enforcement action under existing PFUTP Regulations.
Compliance Requirements
- Market participants must avoid reversal trades that lack genuine trading rationale
- Trading activities should not create false or misleading appearance of market activity
- All trades in stock options must have legitimate business purpose
Important Dates
- Investigation Period: April 1, 2014 to September 30, 2015
- Show Cause Notice: January 25, 2022
- Adjudicating Officer Appointment: September 27, 2021 (transferred September 6, 2024)
Impact Assessment
This enforcement action reinforces SEBI’s commitment to preventing market manipulation in derivatives segments. The case highlights regulatory scrutiny of artificial volume creation through reversal trades and serves as a deterrent for similar manipulative practices in stock options trading.
Impact Justification
Individual enforcement action with broader market implications for options trading practices