Description

SEBI imposes adjudication proceedings against Longview Suppliers Private Limited for executing 27 non-genuine reversal trades in illiquid stock options on BSE during April 2014 to September 2015, creating artificial trading volume of over 1.08 crore units.

Summary

SEBI’s Adjudicating Officer issued an adjudication order (Order/AK/GN/2025-26/32331) against Longview Suppliers Private Limited (PAN: AABCL6956E) for alleged participation in non-genuine reversal trades in the illiquid stock options segment of BSE. The investigation covered the period April 1, 2014 to September 30, 2015, during which 81.40% of all BSE stock options trades (totalling 2,91,744 trades) were found to be allegedly non-genuine. Longview Suppliers was identified as one of the entities involved.

Key Points

  • Longview Suppliers Private Limited executed 27 non-genuine trades across 8 stock options contracts on BSE
  • These trades created artificial volume of 1,08,81,632 units in the illiquid stock options segment
  • Investigation period: April 1, 2014 to September 30, 2015
  • Alleged violations: SEBI PFUTP Regulations 2003 — Regulations 3(a), (b), (c), (d), 4(1), and 4(2)(a)
  • Show Cause Notice (SCN) was issued on September 22, 2021 via SPAD and email
  • Original AO Ms. Maninder Cheema appointed July 27, 2021; case transferred to current AO on April 4, 2025
  • Adjudication Order No: Order/AK/GN/2025-26/32331

Regulatory Changes

No new regulatory changes introduced. This order enforces existing provisions under:

  • Section 15-I 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

Compliance Requirements

  • The noticee (Longview Suppliers Private Limited) is subject to penalty under Section 15HA of the SEBI Act, 1992 for the alleged manipulative and deceptive trading practices
  • Market participants are reminded that reversal trades creating artificial volumes in stock options constitute violations of PFUTP Regulations and are subject to adjudication and monetary penalties

Important Dates

  • April 1, 2014 – September 30, 2015: Investigation period for illiquid stock options trading on BSE
  • July 27, 2021: Initial appointment of Adjudicating Officer (Ms. Maninder Cheema)
  • September 22, 2021: Show Cause Notice issued to Longview Suppliers Private Limited
  • August 10, 2022: Post SCN Intimation (1st PSI) issued
  • April 4, 2025: Current Adjudicating Officer appointed following case transfer

Impact Assessment

This order has low immediate market impact as it pertains to historical violations from 2014-15. However, it reinforces SEBI’s continued enforcement stance on illiquid stock options manipulation — a segment that saw widespread artificial volume creation by multiple entities. The order signals that SEBI pursues enforcement actions even years after the violation period. Market participants involved in similar reversal trade schemes in stock options should note the risk of delayed but persistent regulatory action. The penalty under Section 15HA of the SEBI Act can be significant for proven market manipulation offences.

Impact Justification

Enforcement action against a single private entity for historical violations (2014-15) under PFUTP Regulations. No immediate market-wide impact; relevant as precedent for illiquid stock options manipulation cases.