Description

SEBI imposes penalty on Nimisha Hemani for executing reversal trades in illiquid stock options at BSE during April 2014 to September 2015, creating artificial volumes and misleading market appearance.

Summary

SEBI issued Adjudication Order No. Order/JS/VC/2025-26/31725 against Nimisha Hemani (PAN: ABFPH7961K) for executing non-genuine reversal trades in Illiquid Stock Options (ISO) at BSE during the period from April 1, 2014 to September 30, 2015. The investigation revealed that 2,91,744 trades comprising 81.41% of all trades in BSE’s stock options segment involved reversal of buy and sell positions, creating artificial volumes and false appearance of trading. Nimisha Hemani was identified as one of 14,720 entities who engaged in such manipulative trading practices.

Key Points

  • SEBI conducted investigation into trading activities in Illiquid Stock Options at BSE for April 1, 2014 to September 30, 2015
  • 2,91,744 trades (81.41% of all stock option trades) were reversal trades creating artificial volumes
  • Reversal trades involved entities reversing buy/sell positions in same contract with same counterparty
  • 14,720 entities found to have executed non-genuine trades during investigation period
  • Nimisha Hemani charged with violations of PFUTP Regulations 3(a), (b), (c), (d), 4(1) and 4(2)(a)
  • Show Cause Notice issued on April 04, 2022
  • Adjudicating Officer appointed on April 03, 2025 under Section 15-I of SEBI Act
  • Trades alleged to be manipulative and deceptive, lacking basic trading rationale

Regulatory Changes

No new regulatory changes introduced. This order enforces existing provisions of SEBI (Prohibition of Fraudulent and Unfair Trade Practices) Regulations, 2003.

Compliance Requirements

  • Market participants must ensure all trades have genuine trading rationale
  • Reversal trades with same counterparties creating artificial volumes are prohibited
  • Trading activities must not create false or misleading appearance of trading
  • Entities must comply with PFUTP Regulations prohibiting manipulative and deceptive trading practices

Important Dates

  • Investigation Period: April 1, 2014 to September 30, 2015
  • Show Cause Notice Issued: April 04, 2022
  • Adjudicating Officer Appointed: April 03, 2025
  • Adjudication Order Date: October 14, 2025

Impact Assessment

This is an individual enforcement action with limited market-wide impact. The order addresses historical violations from 2014-2015 in the illiquid stock options segment at BSE. While the severity of market manipulation is high, the impact on current market operations is minimal as it pertains to past conduct by a single entity. The case forms part of SEBI’s broader effort to penalize 14,720 entities involved in similar manipulative trading practices during the investigation period. No specific stocks or broader market segments are currently affected by this adjudication order.

Impact Justification

Individual adjudication order for market manipulation in illiquid stock options from 2014-2015. High severity violation but low current impact as it addresses historical misconduct by single entity. No broader market implications or regulatory changes.