Case Overview

The adjudication proceedings were initiated against Aastha Ruia Beneficial Trust (PAN: AAETA4128P) for alleged violations in the illiquid stock options segment of Bombay Stock Exchange (BSE) during the investigation period April 1, 2014 to September 30, 2015.

SEBI's investigation revealed that 81.41% of all trades (2,91,744 trades) in BSE's stock options segment during this period were non-genuine reversal trades that created artificial volume. The Noticee was identified as one of 14,720 entities involved in such manipulative trading practices.

The specific allegations against the Noticee involved execution of 6 non-genuine reversal trades across 3 stock options contracts, generating artificial volume of 2,58,000 units. The trades demonstrated clear patterns of manipulation:

  • GRSM15APR3900.00CE: 25,000 units bought at ₹2 and sold at ₹22 to same counterparty (S R Tie Up Pvt Ltd) within 3 seconds, creating 19.03% of contract's total volume
  • HDIL15AUG80.00CEW3: 56,000 units bought at ₹4.2 and sold at ₹8.6 to same counterparty (Gradgrind Barter Private Limited) within 5 minutes, creating 17.72% of contract's total volume
  • LNTF15AUG55.00CE: 48,000 units bought at ₹11 and sold at ₹16.2 to same counterparty (Saimed Innovation) within 5 minutes, creating 20% of contract's total volume

The Noticee raised multiple defenses including lack of records due to 6-year document retention policy, allegations that brokers should be responsible, claims that SEBI shouldn't have allowed illiquid stock trading, and arguments about 7-year delay in proceedings. The Adjudicating Officer rejected all defenses, noting that thousands of entities had availed settlement schemes offered in 2020, 2022, and 2024, which the Noticee chose not to utilize despite initially offering to pay ₹1.2 lakh to settle.

The Authority relied on Supreme Court precedents (SEBI v. Kishore R Ajmera and SEBI v. Rakhi Trading Private Limited) and SAT judgments that established synchronized trading with same counterparties within short timeframes with significant price variations indicates prior meeting of minds and constitutes manipulative/deceptive devices creating false appearance of trading.

Final Outcome

The Adjudicating Officer found the Noticee guilty of violating Regulations 3(a), (b), (c), (d) and 4(1), 4(2)(a) of SEBI (Prohibition of Fraudulent and Unfair Trade Practices) Regulations, 2003. A penalty of ₹5,00,000 (Rupees Five Lakhs only) was imposed under Section 15HA of the SEBI Act, 1992.

The penalty must be paid within 45 days of order receipt through SEBI's online payment portal. Failure to pay will enable SEBI to initiate recovery proceedings under Section 28A of the SEBI Act, including attachment and sale of properties.

Topics: SEBI Enforcement, Market Manipulation, Illiquid Stock Options