SEBI Slaps Rs15 Lakh Penalty on 3 for Trading in Illiquid Stock Options
Moneylife Digital Team 24 November 2025
Market regulator Securities and Exchange Board of India (SEBI) has imposed penalties of Rs15 lakh on three entities for engaging in non-genuine trading activities within the illiquid stock options segment of the BSE. Each implicated entity has been fined Rs5 lakh for participating in these fraudulent activities.
 
The entities penalised include Sankat Mochan Holdings Pvt Ltd, Tarkeshwar Kaloya and Kusum Devi Agarwal.
 
In three separate orders, Jai Sebastian and Amit Kapoor, adjudicating officers (AOs) of SEBI, articulated that the trading behaviour of these three entities confirmed that such trades were not normal, indicating that the trades executed by the noticees were not genuine and being non-genuine, created an appearance of artificial trading volumes in respective contracts in violation of Regulations 3(a), (b), (c), (d), 4(1) and 4(2)(a) of PFUTP Regulations, 2003.
 
SEBI investigated these trading activities, which spanned between April 2014 to September 2015. It was discovered that a staggering 291,744 trades, accounting for about 81.40% of all trades executed in the stock options segment, were potentially non-genuine. This alarming statistic highlighted how these activities distorted the market by creating artificial demand and supply volumes.
 
SEBI also mentioned that such trades were alleged to be non-genuine and created a false or misleading appearance of trading in terms of artificial volumes in stock options; therefore, they were alleged to be manipulative and deceptive.
 
SEBI has stated that Mr Kaloya and Ms Agarwal executed two non-genuine trades each. Sankat Mochan Holdings executed a total of four trades, three buy trades and one sell trade 
 
The implicated entities executed trades characterised by reversal trades which, typically, involve buying and selling the same securities almost simultaneously to create an illusion of heightened trading activity, the market regulator says, adding, "Such practices not only mislead other market participants but also undermine the fairness and transparency of the trading environment."
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