Description

SEBI adjudication order against Sweta Agarwal for executing 3 non-genuine reversal trades in illiquid stock options at BSE during April 2014 to September 2015, creating artificial volume of 600,000 units in violation of PFUTP Regulations 2003.

Summary

SEBI issued Adjudication Order No. Order/AK/GN/2026-27/32382 against Sweta Agarwal (PAN: BKEPA0806R) for alleged participation in non-genuine reversal trades in the illiquid stock options segment of BSE during the investigation period of April 1, 2014 to September 30, 2015. The Noticee is alleged to have executed 3 non-genuine trades in 1 stock options contract, creating artificial volume of 600,000 units in violation of SEBI’s PFUTP Regulations, 2003.

Key Points

  • SEBI investigated large-scale reversal trades in BSE’s stock options segment that created artificial trading volumes
  • A total of 2,91,744 trades (81.40% of all BSE stock options trades during the investigation period) were found to be allegedly non-genuine
  • Sweta Agarwal executed 3 non-genuine trades in 1 stock options contract, resulting in artificial volume of 600,000 units
  • Proceedings initiated for violation of Regulations 3(a), 3(b), 3(c), 3(d), 4(1), and 4(2)(a) of SEBI PFUTP Regulations, 2003
  • Penalty being considered under Section 15HA of the SEBI Act, 1992
  • Order number: Order/AK/GN/2026-27/32382

Regulatory Changes

No new regulatory changes introduced. This order applies existing provisions of SEBI (Prohibition of Fraudulent and Unfair Trade Practices) Regulations, 2003, specifically Regulations 3(a), (b), (c), (d), 4(1), and 4(2)(a), which prohibit fraudulent, manipulative, and deceptive trade practices.

Compliance Requirements

  • Market participants must not engage in reversal trades or any transactions designed to create artificial volumes in the stock options segment
  • Trades must reflect genuine buy/sell intent and not be executed to create false or misleading appearance of trading activity
  • Entities trading in stock options at BSE must ensure compliance with PFUTP Regulations, 2003

Important Dates

  • April 1, 2014 – September 30, 2015: Investigation period for illiquid stock options trading at BSE
  • July 6, 2021: Original appointment of Adjudicating Officer (Mr. Pradeep Kumar)
  • August 31, 2021: Show Cause Notice (SCN) issued to Sweta Agarwal
  • October 21, 2021: Opportunity of hearing provided to the Noticee
  • April 4, 2025: Current undersigned Adjudicating Officer appointed via transfer of cases
  • 2026-27: Financial year of the adjudication order issuance

Impact Assessment

This is an individual enforcement action with limited direct market impact. It forms part of SEBI’s broader and ongoing crackdown on illiquid stock options manipulation at BSE, which identified 2,91,744 non-genuine trades constituting 81.40% of all options trades during the investigation period. The case underscores SEBI’s continued pursuit of enforcement actions stemming from the 2014-2015 BSE illiquid stock options investigation, even years after the investigation period. Market participants involved in similar reversal trading strategies face potential penalties under Section 15HA of the SEBI Act, 1992.

Impact Justification

Individual enforcement action against a single trader for a small number of non-genuine trades (3 trades) in a historical investigation period (2014-2015). While part of a larger systemic investigation into BSE illiquid stock options manipulation, the individual impact is limited.