Description

SEBI adjudication order imposing penalty on Prachi Tradevine Pvt Ltd for executing 8 non-genuine reversal trades in illiquid stock options on BSE during April 2014 to September 2015, creating artificial volume of 1,67,000 units.

Summary

SEBI’s Adjudicating Officer issued Order No. Order/AK/RK/2025-26/32334 against Prachi Tradevine Pvt Ltd (PAN: AAFCP7889L) for executing non-genuine reversal trades in illiquid stock options on BSE during the investigation period of April 1, 2014 to September 30, 2015. The entity executed 8 non-genuine trades across 4 stock options contracts, contributing to artificial volume creation of 1,67,000 units on BSE.

Key Points

  • Noticee: Prachi Tradevine Pvt Ltd (PAN: AAFCP7889L)
  • Order Number: Order/AK/RK/2025-26/32334 under Section 15-I of SEBI Act, 1992
  • Investigation period: April 1, 2014 to September 30, 2015
  • SEBI found 2,91,744 trades (81.40% of all stock options trades on BSE during IP) were allegedly non-genuine across all entities investigated
  • Prachi Tradevine specifically executed 8 non-genuine trades in 4 stock options contracts creating artificial volume of 1,67,000 units
  • Alleged violations: Regulations 3(a), (b), (c), (d), 4(1) and 4(2)(a) of SEBI PFUTP Regulations, 2003
  • Show Cause Notice dated August 08, 2022 (Ref: EAD-8/AS/VS/36563/2022) was issued
  • Original AO: Smt. Asha Shetty; case later transferred, current AO appointed April 03, 2025

Regulatory Changes

No new regulatory changes introduced. This order applies existing SEBI (Prohibition of Fraudulent and Unfair Trade Practices Relating to Securities Market) Regulations, 2003 (PFUTP Regulations) to historical trading violations.

Compliance Requirements

  • The noticee is subject to penalty under Section 15HA of the SEBI Act for violations of PFUTP Regulations
  • No new compliance obligations are imposed on other market participants through this order
  • Entities trading in stock options must ensure trades are genuine and do not create artificial volumes or misleading appearances of trading activity

Important Dates

  • Investigation Period: April 1, 2014 – September 30, 2015
  • Show Cause Notice issued: August 08, 2022
  • Current AO appointed: April 03, 2025
  • Order issued: April 2026

Impact Assessment

This is a targeted enforcement action with minimal broader market impact. The order pertains to historical illiquid stock options manipulation on BSE and is part of SEBI’s ongoing enforcement drive against entities that participated in large-scale reversal trades during 2014-2015. The penalty affects only Prachi Tradevine Pvt Ltd. The case serves as a deterrent signal reaffirming SEBI’s continued pursuit of historical market manipulation cases even years after the investigation period.

Impact Justification

Routine enforcement order against a single entity for historical trading violations (2014-2015). No systemic regulatory changes or broad market impact; penalty is entity-specific with no implications for current market participants beyond deterrence.