Saturday, 30 September 2023 02:15 PM IST

SEBI penalises 12 individuals for fraudulent trading

Capital markets regulator Sebi on Thursday imposed a total penalty of Rs 20 lakh on 12 individuals for indulging in fraudulent trading in the scrip of Finalysis Credit & Guarantee Company.

The regulator levied a penalty of Rs 18 lakh on 12 individuals, which needs to be paid jointly and severally.

Besides, a fine of Rs 2 lakh has been imposed on one of the individuals for not making timely disclosures to the company and BSE regarding the acquisition of shares in FCGCL, thereby violating the PIT (Prohibition of insider trading) norms and SAST (Substantial Acquisition of Shares and Takeovers) norms.

Sebi, which investigated the trading activities in the scrip of Finalysis Credit & Guarantee Company (FCGCL), found that these entities were connected and working in unison.

The regulator observed that all the entities, during the investigation period, had entered into transactions without intending to transfer beneficial ownership, in the off-market or on-market legs and overall beneficial ownership was not transferred. These trades gave a misleading appearance of trading in the securities market.

Further, it was revealed that a certain set of entities bought shares in off-market and offloaded shares in the exchange platforms, and sold the such shares back to the same set of entities, which contributed to artificial increase of trading volume, without actual change in the beneficiary ownership of the shares.

By indulging in such trades, these 12 entities violated the provisions of PFUTP (Prohibition of Fraudulent and Unfair Trade Practices) norms.

The order comes after Securities Appellate Tribunal (SAT) in March directed Sebi to pass a fresh order within six months in the matter. #Eiinfohub source-PTI Economicstime