Description

SEBI adjudication order against Amit Kumar Agarwal HUF for non-genuine trades in illiquid stock options creating artificial volumes on BSE during April 2014 to September 2015.

Summary

SEBI issued an adjudication order (Order No. Order/AK/GN/2025-26/31998) against Amit Kumar Agarwal HUF (PAN: AAIHA6110R) for executing non-genuine trades in illiquid stock options on BSE between April 1, 2014 and September 30, 2015. The entity allegedly executed 4 non-genuine trades in 2 stock options contracts resulting in artificial volume of 20,00,000 units. The order was issued under Section 15-I of SEBI Act, 1992 for violations of PFUTP Regulations, 2003. The adjudication proceedings were initiated after SEBI investigation revealed that 2,91,744 trades (81.40% of all trades) in BSE stock options segment during the investigation period were non-genuine, creating artificial volumes.

Key Points

  • Amit Kumar Agarwal HUF executed 4 non-genuine reversal trades in 2 stock options contracts on BSE
  • Total artificial volume created: 20,00,000 units
  • Investigation period: April 1, 2014 to September 30, 2015
  • Overall market impact: 2,91,744 non-genuine trades comprising 81.40% of all BSE stock options trades during investigation period
  • Violations alleged under Regulations 3(a), (b), (c), (d), 4(1) and 4(2)(a) of PFUTP Regulations, 2003
  • Show Cause Notice issued on September 27, 2021
  • Original Adjudicating Officer: Mr. Suresh B Menon (appointed July 27, 2021)
  • Case transferred to new AO on April 04, 2025
  • Trades created false or misleading appearance of trading through artificial volumes

Regulatory Changes

No new regulatory changes introduced. This is an enforcement action under existing SEBI (Prohibition of Fraudulent and Unfair Trade Practices) Regulations, 2003.

Compliance Requirements

This is an individual enforcement order. Market participants should ensure:

  • All trades executed are genuine with economic rationale
  • Trading activities do not create artificial volumes or misleading appearance
  • Reversal trades in illiquid instruments are avoided unless commercially justified
  • Compliance with PFUTP Regulations regarding fraudulent and manipulative trade practices

Important Dates

  • Investigation Period: April 1, 2014 to September 30, 2015
  • AO Appointment: July 27, 2021 (original), April 04, 2025 (transfer)
  • Show Cause Notice: September 27, 2021
  • First Post SCN Intimation: August 04, 2022
  • Order Date: January 28, 2026

Impact Assessment

Limited market impact as this is a retrospective enforcement action against a single HUF entity for violations committed during 2014-2015. The order serves as a deterrent example for market participants engaging in non-genuine trading activities. While the investigation revealed widespread manipulation (81.40% of BSE stock options trades), this specific order addresses only one participant’s violations. The case demonstrates SEBI’s continued focus on maintaining market integrity and taking action against manipulative practices even years after occurrence. No immediate operational or regulatory impact on current market participants beyond reinforcing existing compliance obligations under PFUTP Regulations.

Impact Justification

Individual entity enforcement action for historical violations (2014-2015) with limited market-wide impact. Relevant for compliance awareness but does not affect current market operations or create new regulatory requirements.