Description

SEBI adjudication order imposing penalty on Anita Jhajharia for executing non-genuine reversal trades in illiquid stock options on BSE during April 2014 to September 2015, violating PFUTP Regulations.

Summary

SEBI’s Adjudicating Officer issued an order against Anita Jhajharia (PAN: ACQPJ4887N) for engaging in non-genuine reversal trades in the Illiquid Stock Options (ISO) segment of 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, finding that 2,91,643 trades (81.38% of all trades) involved non-genuine reversal of buy and sell positions
  • Anita Jhajharia was identified among 14,720 entities that executed non-genuine trades in BSE’s stock options segment during the investigation period
  • The Noticee’s trades involved reversing buy or sell positions in a contract with the same counterparty, creating false or misleading appearance of trading activity
  • A Show Cause Notice was issued on March 14, 2022 by the erstwhile Adjudicating Officer
  • The current AO was appointed via communiqué dated April 04, 2025 following transfer of the case
  • Violations alleged under PFUTP Regulations 3(a), (b), (c), (d), 4(1) and 4(2)(a)
  • Proceedings initiated under Section 15-I of SEBI Act, 1992 read with Rule 5 of SEBI (Procedure for Holding Inquiry and Imposing Penalties) Rules, 1995
  • Penalty adjudged under Section 15HA of the SEBI Act

Regulatory Changes

No new regulatory changes introduced. This order applies existing SEBI (Prohibition of Fraudulent and Unfair Trade Practices) Regulations, 2003 to enforce against historical market manipulation.

Compliance Requirements

  • Market participants must avoid executing reversal trades that create artificial volumes or false appearance of trading activity
  • Trades must have genuine economic rationale and not be coordinated with counterparties to manipulate market perception
  • Entities must comply with PFUTP Regulations 3(a), (b), (c), (d), 4(1) and 4(2)(a) prohibiting fraudulent and unfair trade practices

Important Dates

  • April 1, 2014 – September 30, 2015: Investigation period for illiquid stock options trading on BSE
  • March 14, 2022: Show Cause Notice issued to the Noticee
  • April 04, 2025: Current Adjudicating Officer appointed following case transfer
  • March 9, 2026: Date of adjudication order (Order/JS/RJ/2025-26/32197)

Impact Assessment

This order is part of SEBI’s broader enforcement sweep against manipulation in BSE’s illiquid stock options segment, which involved over 14,720 entities and affected 81.38% of all trades in the segment during the investigation period. The individual impact on Anita Jhajharia includes potential monetary penalty under Section 15HA of the SEBI Act. The broader market impact is historical — the manipulation occurred during 2014-2015 and SEBI’s ongoing enforcement actions serve as a deterrent against similar manipulative trading practices. No immediate market-wide operational changes are required.

Impact Justification

Individual enforcement action against a single trader for historical violations (2014-2015); part of a large-scale SEBI investigation into BSE illiquid stock options manipulation affecting 14,720 entities. Limited broader market impact but significant from regulatory enforcement perspective.