Description

SEBI adjudication order imposing penalty on Anju Agarwal 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/VC/2025-26/32227) against Anju Agarwal (PAN: ACRPA9417G) for participating in non-genuine reversal trades in Illiquid Stock Options (ISO) 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 PFUTP Regulations.

Key Points

  • SEBI investigated large-scale reversal trades in BSE’s Illiquid Stock Options segment covering April 2014 to September 2015
  • 2,91,744 trades comprising 81.41% of all stock options trades on BSE were identified as non-genuine reversal trades
  • 14,720 entities were found to have executed such non-genuine trades; Anju Agarwal was one of them
  • Reversal trades involved entities reversing buy/sell positions with the same counterparty, creating artificial volume
  • Alleged violations: Regulations 3(a), 3(b), 3(c), 3(d), 4(1), and 4(2)(a) of SEBI PFUTP Regulations, 2003
  • Show Cause Notice (SCN) was issued on November 08, 2021
  • The case was transferred to the current Adjudicating Officer, appointed on April 03, 2025
  • Proceedings initiated under Section 15-I of the SEBI Act, 1992 read with Rule 5 of SEBI Inquiry Rules, 1995

Regulatory Changes

No new regulatory changes introduced. This is an enforcement order applying existing provisions of the SEBI (Prohibition of Fraudulent and Unfair Trade Practices) Regulations, 2003 and Section 15HA of the SEBI Act, 1992.

Compliance Requirements

  • Market participants must not engage in reversal trades or any trading activity that creates artificial volumes or misleading appearances of trading
  • Traders are required to ensure all trades have genuine economic rationale and do not manipulate market prices or volumes
  • Violations of PFUTP Regulations 3(a), (b), (c), (d), 4(1), and 4(2)(a) are subject to monetary penalties under Section 15HA of the SEBI Act

Important Dates

  • Investigation Period: April 1, 2014 – September 30, 2015
  • Show Cause Notice Issued: November 08, 2021
  • New AO Appointed: April 03, 2025
  • Order Reference: Order/JS/VC/2025-26/32227

Impact Assessment

This order is part of SEBI’s broader enforcement action against approximately 14,720 entities involved in manipulative trading in BSE’s illiquid stock options segment. The direct market impact is limited given the historical nature of the violations. However, the order reinforces SEBI’s continued pursuit of market manipulation cases even years after the conduct, signaling strong deterrence. Individual traders and brokers should note that participation in coordinated reversal trades—even in low-liquidity segments—carries significant regulatory risk including monetary penalties.

Impact Justification

Enforcement action against an individual trader for historical manipulation in illiquid stock options segment; significant from regulatory precedent standpoint but limited direct market impact as it concerns past conduct.