Description

SEBI adjudication order imposing penalty on Shiw Mohan Jaiswal for executing non-genuine trades in illiquid stock options segment at BSE during April 2014 to September 2015.

Summary

SEBI issued an adjudication order against Shiw Mohan Jaiswal (PAN: ADSPJ7624G) for executing non-genuine reversal trades in illiquid stock options at BSE during April 1, 2014 to September 30, 2015. The noticee executed 2 non-genuine trades in 1 stock options contract resulting in artificial volume of 35,250 units. The trades were found to be manipulative and deceptive, creating false or misleading appearance of trading. Proceedings were initiated under SEBI (Prohibition of Fraudulent and Unfair Trade Practices Relating to Securities Market) Regulations, 2003.

Key Points

  • SEBI investigation revealed 2,91,744 trades (81.40% of all trades) in BSE stock options segment during investigation period were allegedly non-genuine
  • Shiw Mohan Jaiswal executed 2 non-genuine trades in 1 stock options contract
  • Trades resulted in artificial volume of 35,250 units
  • Investigation period: April 1, 2014 to September 30, 2015
  • Show Cause Notice issued on August 5, 2022
  • Alleged violations of Regulations 3(a), (b), (c), (d), 4(1) and 4(2)(a) of PFUTP Regulations
  • Adjudicating Officer initially appointed on September 20, 2021; case transferred with new AO appointed April 3, 2025

Regulatory Changes

No new regulatory changes introduced. This is an enforcement action applying existing PFUTP Regulations.

Compliance Requirements

  • Market participants must refrain from executing reversal trades that create artificial volumes
  • Trading activities in stock options must be genuine and not manipulative
  • Trades should not create false or misleading appearance of trading in securities
  • Market participants must comply with SEBI (Prohibition of Fraudulent and Unfair Trade Practices Relating to Securities Market) Regulations, 2003

Important Dates

  • Investigation Period: April 1, 2014 to September 30, 2015
  • Initial AO Appointment: September 20, 2021
  • Show Cause Notice Issued: August 5, 2022
  • AO Transfer/Reassignment: April 3, 2025
  • Adjudication Order Number: Order/AK/DS/2025-26/31821

Impact Assessment

This is an individual enforcement action with minimal market impact. The order addresses historical violations from 2014-2015 involving a single entity and limited trading activity (2 trades). The case is part of SEBI’s broader crackdown on manipulation in illiquid stock options at BSE, where systemic issues were identified with over 81% of trades being non-genuine during the investigation period. While this specific order has low direct impact, it reinforces SEBI’s commitment to maintaining market integrity and deterring manipulative practices in derivatives segments.

Impact Justification

Individual adjudication order for historical violations (2014-2015) involving limited trades (2 trades, 35,250 units). No systemic market impact or precedent-setting implications.