Description

SEBI adjudication order imposing penalty on Alka Dhanuka for executing 9 non-genuine reversal trades in illiquid stock options at BSE during April 2014 to September 2015, creating artificial volume of 20,23,750 units.

Summary

SEBI has passed an adjudication order (No. Order/AK/GN/2026-27/32408) against Alka Dhanuka (PAN: AAGPD0729F) for alleged participation in non-genuine reversal trades in the illiquid stock options segment of BSE during the investigation period (IP) of April 1, 2014 to September 30, 2015. SEBI’s investigation found that 2,91,744 trades — constituting 81.40% of all stock options trades at BSE during the IP — were allegedly non-genuine, creating artificial trading volumes.

Key Points

  • Alka Dhanuka executed 9 non-genuine trades across 4 stock options contracts during the investigation period
  • These trades created artificial volume of 20,23,750 units in the BSE stock options segment
  • The trades are alleged to be manipulative and deceptive, creating false or misleading appearance of trading activity
  • Violations alleged under PFUTP Regulations 3(a), (b), (c), (d), 4(1), and 4(2)(a)
  • Show Cause Notice was issued on August 02, 2022 and served via SPAD and email on August 08, 2022
  • Adjudication proceedings were initially assigned to AO N Hariharan; transferred to current undersigned AO via order dated April 03, 2025
  • Noticee was also intimated about the SEBI Settlement process in Part-B of the SCN

Regulatory Changes

No new regulatory changes introduced. This order applies existing provisions of:

  • SEBI (Prohibition of Fraudulent and Unfair Trade Practices Relating to Securities Market) Regulations, 2003 (PFUTP Regulations), Regulations 3(a), (b), (c), (d), 4(1), and 4(2)(a)
  • Section 15HA of the SEBI Act, 1992 (penalty for fraudulent and unfair trade practices)
  • Rule 5 of SEBI (Procedure for Holding Inquiry and Imposing Penalties) Rules, 1995

Compliance Requirements

This order is specific to the named noticee and does not impose new compliance obligations on other market participants. However, it reinforces the following standing requirements for all market participants:

  • Refrain from executing reversal trades or any trades that create artificial volumes in stock options or any other segment
  • Avoid any trading activity that creates a false or misleading appearance of trading
  • Ensure all trades are genuine and not manipulative or deceptive in nature

Important Dates

  • April 1, 2014 – September 30, 2015: Investigation period (IP) for alleged non-genuine trades
  • August 02, 2022: Show Cause Notice (SCN) issued to Alka Dhanuka
  • August 08, 2022: SCN served via SPAD and email
  • April 03, 2025: Current Adjudicating Officer appointed following case transfer
  • 2026-05-17: Adjudication order issued

Impact Assessment

This is an individual enforcement action with no direct impact on broader market operations or trading rules. The significance lies in SEBI’s continued pursuit of historical illiquid stock options manipulation cases at BSE, demonstrating that enforcement actions can be initiated years after the violation period. Market participants involved in similar reversal trading activities during 2014–2015 may face comparable proceedings. The case is part of a larger SEBI investigation that identified 81.40% of BSE stock options trades during the IP as allegedly non-genuine, suggesting numerous similar orders may follow against other entities.

Impact Justification

Individual enforcement action against a single entity for historical trading violations (2014-2015). No new regulatory changes or broad market implications; impact is confined to the named noticee.