Description

SEBI adjudication order against Late Alok Kumar Singhania for executing non-genuine reversal trades in Illiquid Stock Options on BSE during April 2014 to September 2015, in violation of PFUTP Regulations.

Summary

SEBI has issued an adjudication order (Order No. Order/JS/YK/2025-26/32128) against Late Alok Kumar Singhania (PAN: AKOPS3982M) for allegedly executing non-genuine reversal trades in the Illiquid Stock Options (ISO) segment of BSE. The investigation covered the period from April 1, 2014 to September 30, 2015, during which SEBI identified systemic manipulation through coordinated buy-sell reversals that created artificial trading volumes.

Key Points

  • SEBI investigated trading in BSE’s Illiquid Stock Options segment for the period April 1, 2014 to September 30, 2015
  • A total of 2,91,744 reversal trades were identified, constituting 81.41% of all trades in BSE’s stock options segment during the investigation period
  • 14,720 entities were found to have executed non-genuine trades; the noticee was one of them
  • Alok Kumar Singhania allegedly participated in reversal trades — buying and selling the same contract with the same counterparty — creating false or misleading appearance of trading activity
  • Such trades are alleged to be manipulative, deceptive, and lacking basic trading rationale
  • The noticee is deceased (referred to as “Late Alok Kumar Singhania”)
  • A Show Cause Notice was issued on August 02, 2022
  • The current Adjudicating Officer was appointed on April 03, 2025 following transfer of the case

Regulatory Changes

No new regulatory changes are introduced. This order is an enforcement action under existing provisions of:

  • Section 15-I and Section 15HA of the SEBI Act, 1992
  • Rule 5 of SEBI (Procedure for Holding Inquiry and Imposing Penalties) Rules, 1995
  • Regulations 3(a), (b), (c), (d), 4(1), and 4(2)(a) of SEBI (Prohibition of Fraudulent and Unfair Trade Practices) Regulations, 2003 (PFUTP Regulations)

Compliance Requirements

  • No new compliance requirements for the broader market
  • This order is specific to the noticee’s alleged violations during the investigation period
  • Market participants are reminded that reversal trades creating artificial volume constitute violations of PFUTP Regulations and can attract penalties under Section 15HA of the SEBI Act

Important Dates

  • April 1, 2014 – September 30, 2015: Investigation period for ISO trading on BSE
  • August 02, 2022: Show Cause Notice issued to the noticee
  • April 03, 2025: Current Adjudicating Officer appointed following case transfer
  • February 2026: Adjudication order issued

Impact Assessment

The direct market impact of this order is low, as it pertains to a deceased individual and historical trading activity from over a decade ago. However, this order is part of SEBI’s broader enforcement sweep against 14,720 entities involved in the BSE ISO manipulation scheme, which remains one of SEBI’s largest coordinated market manipulation investigations. The cumulative effect of such orders reinforces SEBI’s commitment to prosecuting artificial volume creation in thinly traded derivatives segments. Practitioners and participants in options markets should note SEBI’s continued pursuit of reversal trade cases even years after the fact.

Impact Justification

Enforcement action against a deceased individual for historical manipulation in BSE's illiquid stock options segment. Significant as part of SEBI's large-scale crackdown on 14,720 entities involved in reversal trades, but direct market impact is low given the noticee is deceased and the investigation period ended over a decade ago.