Description

SEBI adjudication order imposing penalty on Ravi Himmatramka and Sons HUF 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’s Adjudicating Officer issued an order (No. Order/JS/DP/2025-26/32175) against Ravi Himmatramka and Sons HUF (PAN: AAOHR1118J) for participating in non-genuine reversal trades in the Illiquid Stock Options (ISO) segment on BSE during the investigation period of April 1, 2014 to September 30, 2015. The trades were found to be manipulative and deceptive, creating artificial trading volumes in violation of SEBI’s PFUTP Regulations.

Key Points

  • SEBI investigated large-scale reversal trades in BSE’s Illiquid Stock Options segment for the period April 1, 2014 to September 30, 2015.
  • A total of 2,91,744 trades comprising 81.41% of all trades in BSE’s stock options segment were identified as reversal trades lacking genuine trading rationale.
  • 14,720 entities were found to have executed non-genuine trades; Ravi Himmatramka and Sons HUF was one such entity.
  • The Noticee’s trades allegedly created false or misleading appearance of trading and artificial volumes in stock options contracts.
  • The adjudicating officer was appointed on April 4, 2025 following transfer of the case from a prior AO.
  • A Show Cause Notice was issued to the Noticee on August 11, 2022 under Rule 4(1) of SEBI (Procedure for Holding Inquiry and Imposing Penalties) Rules, 1995.

Regulatory Changes

No new regulatory changes introduced. This order applies existing provisions of:

  • 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).
  • Section 15HA and Section 15-I of the SEBI Act, 1992.
  • Rule 5 of SEBI (Procedure for Holding Inquiry and Imposing Penalties) Rules, 1995.

Compliance Requirements

  • The Noticee (Ravi Himmatramka and Sons HUF) is required to comply with the penalty imposed under Section 15HA of the SEBI Act.
  • Market participants are reminded to refrain from executing reversal trades or any trades that create artificial volumes or misleading appearances of trading activity in stock options.

Important Dates

  • April 1, 2014 – September 30, 2015: Investigation period for illiquid stock options trading on BSE.
  • August 11, 2022: Show Cause Notice issued to the Noticee.
  • April 4, 2025: Current Adjudicating Officer appointed following case transfer.

Impact Assessment

This is an individual enforcement action with no direct broader market impact. It is part of SEBI’s ongoing series of adjudication orders stemming from its large-scale investigation into illiquid stock options manipulation on BSE. The order reinforces SEBI’s continued pursuit of entities involved in the BSE ISO manipulation case, which involved over 14,000 entities. Market participants, particularly HUFs and retail entities active in derivatives, should note SEBI’s sustained enforcement in this matter even a decade after the violation period.

Impact Justification

Entity-specific enforcement action against a single HUF for historical trading violations (2014-2015). No systemic regulatory changes; limited broader market impact.