Sebi shares info on 14,720 entities involved in non-genuine trades with IT Dept, MCA

Continuing with efforts to crack down on illegal trading activities, regulator Sebi has shared its findings about 14,720 entities that indulged in non-genuine trades through illiquid stock options with the Income Tax Department and the Ministry of Corporate Affairs, according to a senior official. The markets regulator came across violations by 14,720 entities while it was probing 59 entities in a case related to alleged trading irregularities in stock options segment of the BSE.

The 59 entities were probed to check whether they violated norms pertaining to fraudulent trade activities during the period from April 1, 2014 March 31, 2015. Later, the scope of investigation was expanded to cover all the entities that had indulged in executing reversal trades in BSE's stock options segment and the time period was also extended to September 30, 2015.

The findings of the probe, relating to profits and losses incurred by the 14,720 entities have been shared with various authorities, the official said. The details have been shared with the Income Tax Department, the Enforcement Directorate, the Ministry of Corporate Affairs (MCA) and the Financial Intelligence Unit.

The matter is likely to be discussed at Sebi's board meeting scheduled for June 21. During the investigation period, out of the more than 21,600 entities that had traded on the BSE's stock options segment, Sebi found that as many as 14,720 entities were involved in "generation of artificial volumes" by executing non-genuine and reversal trades, as per the official.

The investigation period was from April 1, 2014 to September 30, 2015. "The investigation has found that 14,720 entities were involved in executing non-genuine trades in BSE's stock options segment during the investigation period," Sebi had said in an order earlier this year. Adjudication proceedings have been initiated against 567 entities in the first phase, it had said. PTI RAM MKJ