The Securities and Exchange Board of India (SEBI) has imposed a fine of Rs. 10 lakh on Worldwealth Dealtrade Pvt. Ltd. for engaging in manipulative and deceptive trading in illiquid stock options.
The order, dated May 16, 2023, found that Worldwealth Dealtrade 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. 10 lakh on Worldwealth Dealtrade and ordered the company to cease and desist from engaging in such manipulative and deceptive trading.
SEBI’s action against Worldwealth Dealtrade 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 Worldwealth Dealtrade’s trading activities was initiated in 2015.
- The investigation found that Worldwealth Dealtrade had engaged in manipulative and deceptive trading in illiquid stock options for a period of over one year.
- SEBI’s order against Worldwealth Dealtrade 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.
