SEBI pulled up 8 entities for fraudulent trading practices on Monday. The entities were involved in buying and selling of Videocon shares in reversal and synchronised trades that affected the market value of these stocks.
Here are the details of the same!
Key Highlights Regarding Penalisation of 8 Entities
- The 8 entities which SEBI has pulled up are:
- Akansha Commodities Pvt Ltd
- Superdeal Fincom Pvt Ltd
- Coastal Fertilisers Pvt Ltd
- Godavari Commercial Services Private Ltd.
- Invorex Vincom Pvt Ltd.
- Acuity Merchants Pvt Ltd.
- Kaberi Goods Pvt. Ltd.
These were responsible to enter into reversal and synchronised trading of Videocon shares.
These 8 entities are facing a fine of Rs. 16 lakh, which is payable collectively for violating the Prohibition of Fraudulent and Unfair Trade Practices.
Moreover, SEBI stated that these entities had generated artificial volume by entering into synchronised trades. They had also created a misleading scenario, presenting that they were trading on the scrip. Further, they were also guilty of reverse trading.
In the past, SEBI had taken a strict stand against malpractices originating on the trading floor. Hence, they have stuck to their guns this time around in penalising the guilty. Reversal trading and synchronised trading give a false impression of volume and manipulate the other security indicators. Hence, the severity of the penalty.
Frequently Asked Questions
- What is synchronised trading?
Synchronised trade occurs when a buyer and a seller respectively buy and sell the same quantity of shares at the same price and at the same time. When traders or a group of traders intentionally do this, they can manipulate security indicators, such as its price and volume.
- What are the types of synchronised trading?
There are different forms of synchronised trading. They are self trades, reversal trades, circular trades and cross deals.
- Are all synchronised trading intentional?
Synchronised trading is not, in all cases, intentional. Sometimes it may occur due to software-based trading or inefficiency in the stock exchange’s executing orders.
- What are the effects of synchronised trading?
The effects of synchronised trading are that they change the basic indicators of the scrip. Mostly it is the price of the scrip that is changed.
- How are trades determined as Synchronised trades?
PQT Test is responsible to determine if a trade is synchronised or not. P stands for the price, Q for quantity, and T for Time. These three factors are looked at to determine if the trade was synchronised.