Description

SEBI adjudication order against Bimala Joshi for alleged non-genuine reversal trades in illiquid stock options on BSE during April 2014 to September 2015, creating artificial volumes.

Summary

SEBI issued Adjudication Order No. Order/JS/VC/2025-26/32016 against Bimala Joshi (PAN: APTPJ9146A) for alleged violations related to 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 81.41% of all trades (2,91,744 trades) executed in BSE’s stock options segment were reversal trades lacking basic trading rationale and creating artificial volumes. Bimala Joshi was one of 14,720 entities found executing such non-genuine trades.

Key Points

  • SEBI observed large-scale reversal of trades in Illiquid Stock Options on BSE creating artificial volume
  • Investigation period: April 1, 2014 to September 30, 2015
  • Total of 2,91,744 trades comprising 81.41% of all trades in stock options segment were reversal trades
  • Reversal trades involved entities reversing buy/sell positions in contracts with same counterparty
  • 14,720 entities were found executing non-genuine trades during the investigation period
  • Bimala Joshi was one of the entities executing reversal trades alleged to be manipulative and deceptive
  • Show Cause Notice dated August 05, 2022 was issued to the Noticee
  • Alleged violations of PFUTP Regulations 3(a), (b), (c), (d), 4(1) and 4(2)(a)
  • Adjudicating Officer appointed on April 03, 2025 under Section 15-I of SEBI Act, 1992

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

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

Important Dates

  • Investigation Period: April 1, 2014 to September 30, 2015
  • Show Cause Notice issued: August 05, 2022
  • Adjudicating Officer appointed: April 03, 2025
  • Adjudication Order issued: January 30, 2026

Impact Assessment

This adjudication order is part of SEBI’s broader enforcement action against widespread manipulation in illiquid stock options on BSE during 2014-2015. The order targets individual accountability among 14,720 entities involved in creating artificial volumes through reversal trades. Market impact is minimal as this relates to historical violations in an illiquid segment. The action demonstrates SEBI’s continued efforts to maintain market integrity and deter manipulative trading practices, even retrospectively. Individual investors and market participants should note that non-genuine trades lacking economic rationale can attract regulatory penalties under PFUTP Regulations.

Impact Justification

Individual adjudication order against one entity among 14,720 entities involved in non-genuine trades during 2014-2015. Limited market impact as enforcement action relates to historical violations in illiquid stock options segment.