Description

SEBI imposed adjudication proceedings against Mangalkamna Dealer Pvt. Ltd. for executing non-genuine reversal trades in illiquid stock options on BSE during April 2014 to September 2015, creating artificial volumes.

Summary

SEBI initiated adjudication proceedings against Mangalkamna Dealer Pvt. Ltd. (PAN: AAGCM6959A) under Order No. Order/JS/VC/2025-26/31817 for alleged violations of PFUTP Regulations related to execution of non-genuine reversal trades in illiquid stock options on BSE during April 1, 2014 to September 30, 2015. The entity was part of a larger investigation involving 14,720 entities who executed reversal trades comprising 81.41% of all trades in BSE’s stock options segment during the investigation period.

Key Points

  • SEBI investigated large-scale reversal of trades in Illiquid Stock Options on BSE from April 1, 2014 to September 30, 2015
  • Total of 2,91,744 trades (81.41% of all trades in stock options segment) involved reversal of buy and sell positions
  • 14,720 entities executed non-genuine trades during the investigation period
  • Mangalkamna Dealer Pvt. Ltd. was one of the entities executing reversal trades
  • Trades were alleged to create false or misleading appearance of trading through artificial volumes
  • Show Cause Notice dated October 11, 2021 was issued to the Noticee
  • Adjudicating Officer appointed on April 03, 2025 following transfer from erstwhile AO

Regulatory Violations Alleged

  • Violation of Regulation 3(a), (b), (c), (d) of SEBI (Prohibition of Fraudulent and Unfair Trade Practices) Regulations, 2003
  • Violation of Regulation 4(1) and 4(2)(a) of PFUTP Regulations
  • Trades alleged to be manipulative and deceptive in nature
  • Reversal trades lacked basic trading rationale

Compliance Requirements

Not applicable - this is an enforcement action against a specific entity for past violations.

Important Dates

  • Investigation Period: April 1, 2014 to September 30, 2015
  • Show Cause Notice issued: October 11, 2021
  • Adjudicating Officer appointment: April 03, 2025
  • Order Number: Order/JS/VC/2025-26/31817

Impact Assessment

This is an individual enforcement action with minimal market-wide impact. The order relates to historical trading activities from 2014-2015 in illiquid stock options on BSE. While part of a broader investigation involving over 14,000 entities, this specific adjudication order affects only Mangalkamna Dealer Pvt. Ltd. The matter demonstrates SEBI’s continued enforcement against market manipulation practices, particularly reversal trades that create artificial volumes, but does not introduce new regulatory requirements or affect current market operations.

Impact Justification

Individual enforcement action against single entity for historical violations (2014-2015). No broader market implications or regulatory changes.