The Securities and Exchange Board of India (SEBI) has imposed a fine of Rs. 5 lakh on Nemichand Kasturchand Jain for engaging in manipulative and deceptive trading in illiquid stock options.
The order, dated May 16, 2023, found that Nemichand Kasturchand Jain had indulged in a number of activities that were designed to create artificial volume and price movement in illiquid stock options. These activities included:
- Reversing trades shortly after execution
- Placing orders that were unlikely to be executed
- Trading in illiquid stock options with the intent to manipulate prices
SEBI found that these activities had created a false and misleading impression of market activity in illiquid stock options. This had the potential to mislead investors and affect the orderly functioning of the market.
As a result of these findings, SEBI has imposed a fine of Rs. 5 lakh on Nemichand Kasturchand Jain and ordered the individual to cease and desist from engaging in such manipulative and deceptive trading.
SEBI’s action against Nemichand Kasturchand Jain is a reminder that the regulator is committed to protecting investors from fraudulent and manipulative trading practices. Investors should be aware of the risks associated with illiquid stock options and should only trade in these instruments with caution.
Here are some additional details about the case:
- SEBI’s investigation into Nemichand Kasturchand Jain’s trading activities was initiated in 2015.
- The investigation found that Nemichand Kasturchand Jain had engaged in manipulative and deceptive trading in illiquid stock options for a period of over one year.
- SEBI’s order against Nemichand Kasturchand Jain is the latest in a series of actions taken by the regulator to crack down on fraudulent and manipulative trading practices.
- Investors should be aware of the risks associated with illiquid stock options and should only trade in these instruments with caution.
