Description

SEBI imposes penalty on Aashish Kumar Goenka for executing non-genuine reversal trades in illiquid stock options on BSE during April 2014 to September 2015, creating artificial volumes.

Summary

SEBI issued an adjudication order against Aashish Kumar Goenka (PAN: BOCPG5241L) for engaging in non-genuine reversal trades in illiquid stock options on BSE during the investigation period from April 1, 2014 to September 30, 2015. The investigation revealed that 2,91,643 trades comprising 81.38% of all trades in BSE’s stock options segment were reversal trades where entities reversed their buy/sell positions with the same counterparty, creating artificial volumes and false appearance of trading. Aashish Kumar Goenka was identified as one of 14,720 entities involved in such manipulative activities.

Key Points

  • Investigation covered illiquid stock options trading on BSE from April 1, 2014 to September 30, 2015
  • 2,91,643 reversal trades identified, representing 81.38% of all stock options trades on BSE during the period
  • 14,720 entities found engaged in non-genuine trading activities
  • Reversal trades involved entities reversing buy/sell positions with same counterparty in same contract
  • Trades lacked basic trading rationale and created misleading appearance of trading activity
  • Show Cause Notice issued on May 24, 2021
  • Adjudicating Officer appointed on April 04, 2025 following transfer from previous AO

Regulatory Changes

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

Compliance Requirements

  • Market participants must ensure all trades have genuine trading rationale
  • Entities must avoid executing reversal trades that create artificial volumes
  • Trading activities should not create false or misleading appearance of trading
  • Compliance with regulations 3(a), (b), (c), (d), 4(1) and 4(2)(a) of PFUTP Regulations, 2003

Important Dates

  • Investigation Period: April 1, 2014 to September 30, 2015
  • Show Cause Notice Issued: May 24, 2021
  • Adjudicating Officer Appointment: April 04, 2025
  • Order Date: January 22, 2026

Impact Assessment

Market Impact: Low - This is an individual enforcement action related to historical violations from 2014-2015. The order targets past misconduct and does not introduce new market-wide restrictions or regulatory requirements.

Operational Impact: None for general market participants. Only affects the individual noticee who must comply with penalty provisions.

Precedent Value: Reinforces SEBI’s continued enforcement against manipulative trading practices in illiquid derivatives segments, even with significant time lag between violation and adjudication. Serves as deterrent for creating artificial volumes through reversal trades.

Impact Justification

Individual penalty case for past violations (2014-2015) with no systemic market impact or regulatory changes affecting broader market participants