Markets regulator Sebi Thursday imposed a fine of Rs 19.5 lakh on Rector Investments Pvt Ltd for executing non-genuine trades in the illiquid stock options segment on BSE.
"The trading behaviour of the Noticee (Rector) confirms that such trades were not normal and wide variation in prices of the trades in the same contract in a short time without any basis for such wide variation, all indicate that the trades executed by the Noticee were not genuine," the regulator said in an order.
The regulator had conducted a probe into the trading activity in illiquid stock options on BSE covering the period April 2014 to September 2015 after it observed large scale reversal of trades in the segment.
Following the probe, Sebi observed that total 2.91 lakh trades comprising over 80 per cent of all the trades executed in stock options segment during the investigation period were non-genuine.
Rector Investments was among the various entities that indulged in non-genuine trades, the Securities and Exchange Board of India (Sebi) said.
Besides, the non-genuine trades led to misleading appearance of trading, the regulator said.
The firm violated PFUTP (Prohibition of Fraudulent and Unfair Trade Practices) regulations, making it liable for imposing a monetary penalty, Sebi said.