Description

SEBI imposes penalty on Vineet Rajkumar Chopda HUF for executing non-genuine reversal trades in illiquid stock options on BSE during April 2014 to September 2015, creating artificial volumes and false appearance of trading.

Summary

SEBI has issued an adjudication order against Vineet Rajkumar Chopda HUF (PAN: AAFHV9878Q) for alleged violations related to manipulative trading in illiquid stock options on BSE. The investigation covered the period from April 1, 2014 to September 30, 2015, during which SEBI observed large-scale reversal of trades creating artificial volumes. The Noticee was one of 14,720 entities found to have executed non-genuine trades. A Show Cause Notice was issued on November 26, 2021, and the case was transferred to a new Adjudicating Officer on April 3, 2025.

Key Points

  • Investigation period: April 1, 2014 to September 30, 2015
  • Total reversal trades in BSE stock options: 2,91,744 trades (81.41% of all trades)
  • Total entities involved: 14,720 entities executed non-genuine trades
  • Vineet Rajkumar Chopda HUF identified as one entity executing reversal trades
  • Trades involved reversing buy/sell positions with same counterparty in same contract
  • Such trades lacked trading rationale and created false/misleading appearance
  • Alleged violations: Regulations 3(a), (b), (c), (d), 4(1) and 4(2)(a) of PFUTP Regulations
  • Show Cause Notice issued: November 26, 2021
  • Adjudicating Officer appointed: April 3, 2025

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 order serves as a reminder to market participants to:

  • Refrain from executing non-genuine reversal trades that lack economic rationale
  • Avoid creating artificial volumes or false appearance of trading in stock options
  • Ensure all trades are genuine and comply with PFUTP Regulations
  • Maintain proper justification and trading rationale for all transactions

Important Dates

  • Investigation Period: April 1, 2014 to September 30, 2015
  • Show Cause Notice: November 26, 2021
  • Adjudicating Officer Appointment: April 3, 2025
  • Order Number: Order/JS/DP/2025-26/32014

Impact Assessment

The impact of this individual adjudication order is limited as it pertains to historical trading violations by a single HUF entity from 2014-2015. The order is part of a broader enforcement initiative targeting 14,720 entities involved in similar manipulative practices. While the order reinforces SEBI’s commitment to maintaining market integrity and deterring manipulative trading in illiquid stock options, it does not introduce new compliance obligations or affect current market operations. The lengthy timeline from violation (2014-15) to SCN (2021) to final adjudication (2025+) demonstrates SEBI’s systematic approach to processing large-scale investigations involving thousands of entities.

Impact Justification

Individual adjudication order against a single HUF entity for historical violations (2014-2015). No systemic market impact or regulatory policy changes. Part of larger investigation involving 14,720 entities.