Stock Regulator SEBI Imposes Penalty On 23 Entities For Practicing Fraudulent Trading

• SEBI has imposed a total penalty of Rs 2.38 crore on 23 entities and individuals for fraudulent trading activities.
• The penalty has been levied in the range of Rs 5 lakh to Rs 8 lakh.
• The case is related to practicing fraudulent trading activities in the shares of Steel Exchange India Ltd. (SEIL).

The Security Exchange Board Of India (SEBI), on February 1, imposed a total penalty of Rs 2.38 crore on 23 entities and individuals for practicing fraudulent trading activities in the shares of Steel Exchange India Ltd. (SEIL).

The case is related to practicing fraudulent trading activities in the shares prices of Steel Exchange India Ltd. (SEIL) from October to November 2017.

According to the PTI report, the penalty has been levied in the range of Rs 5 lakh to Rs 8 lakh.

SEBI first started an investigation into the shares of SEIL from July 2017 to December 2017. Upon the investigation, the regulator observed that certain promotional SMSes were circulated among investors from October to November 2017, while the company's share price was around Rs 100, which then reached Rs 133 before falling to Rs 42.95.

The stock regulator confirmed that the entities were connected to each other and had entered into synchronized trades and reversal trades among one another to create artificial volume in the scrip of SEIL.

SEBI noted that the entities were entering with significant quantities into reversal and synchronized trades in the scrip of SEIL during the investigation period.

Also Read: SEBI Imposes Rs 40 Crore Fine On RIL For Manipulative Trades In RPL

"The creation of artificial volume by these entities was accompanied by the circulation of false-positive SMSes in favour of Steel Exchange India Ltd., which further attracted the investors into dealing in the shares of the company," SEBI reported.

However, as seen in the instant case, the share price fell significantly thereafter, which may have resulted in losses to the genuine investors, SEBI added.

SEBI's Adjudicating Officer B J Dilip said that the entities and individuals who were engaged in fraudulent trading violated provisions of PFUTP Regulations.

PUFTP (Prohibition of Fraudulent and Unfair Trade Practices relating to Securities Market) pertains to prohibition of fraudulent and unfair trade practices in the shares of the company.

with inputs from PTI (The Press Trust Of India)

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