It is judicial duty to take immediate and proximate facts into evidence to reach a reasonable conclusion – The SECURITIES AND EXCHANGE BOARD OF INDIA

BEFORE THE ADJUDICATING OFFICER SECURITIES AND EXCHANGE BOARD OF INDIA ADJUDICATION ORDER NO.: Order AP SS 2021 22 14720 UNDER SECTION 15 I OF THE SECURITIES AND EXCHANGE BOARD OF INDIA ACT 1992 READ WITH RULE 5 OF THE SECURITIES AND EXCHANGE BOARD OF INDIARULES In respect of: Radha Devi Banka PAN: AKNPB5833B In the matter of dealings in Illiquid Stock Options at BSE Securities and Exchange Board of India observed large scale reversal of trades in the Stock Options segment of the BSE Limitedleading to the alleged creation of artificial volume in the stock options segment. In this regard SEBI conducted an investigation into the trading activity in the illiquid Stock Options segment at the BSE for the period April 01 2014 to September 30 2015was one such client whose reversal trades involved squaring off open positions with a significant difference without any basis for such change in the contract price. The aforesaid reversal trades allegedly resulted into Adjudication Order in respect of Radha Devi Banka in the matter of dealings in Illiquid Stock Options at BSE generation of artificial volumes leading to allegations that the Noticee has violated the provisions of regulations 3(a)(c)and regulations 4(1) 4(2)(a) of the SEBIRegulations 2003 read with rule 3 of the SEBI Rules 1995 hereinafter referred to as “Adjudication Rules”) vide order dated July 02 2021 to inquire into and adjudge under section 15HA of the SEBI Act against the Noticee for the alleged violation of the aforesaid provisions of PFUTP Regulations 2003. SHOW CAUSE NOTICE REPLY AND HEARING 4. A 09 hereinafter referred to as “SCN”) was issued to the Noticee under Rule 4(1) of the Adjudication Rules to show cause as to why an inquiry should not be initiated against the Noticee and why penalty should not be imposed on the Noticee under Section 15HA of the SEBI Act for the violations alleged to have been committed 5. The SCN issued to the Noticee inter alia mentioned alleged the following: by the Noticee. 5. The Noticee was one of the entities which indulged in reversal trades which allegedly created false and misleading appearance of trading generating artificial volumes in the Stock Options Segment of BSE during the investigation Adjudication Order in respect of Radha Devi Banka in the matter of dealings in Illiquid Stock Options at BSE period. The Noticee is alleged to have engaged in reversal trades through 2 trades in 1 unique contract which led to generation of alleged artificial volume of 35 000 units. These trades of the Noticee involved reversal with the same counterparty on the same day but at different prices. 7. A summary of dealings of Noticee in 1 Stock Options contract in which the said Noticee allegedly executed reversal trades during the investigation period is as … follows: S. No. Contract Name Rate in Rs.) no. of no. of by Noticee contract to Volume in by Noticee Volume in BIOC15JUL480.00PE 17 500 17 500 8. The abovementioned reversal trades and volumes are illustrated through the dealings of Noticee in the one contract viz “BIOC15JUL480.00PE” during the investigation period as follows: a) During the investigation period 2 trades for 17 500 units were executed by the Noticee in the said contract on July 06 2015. b) While dealing in the said contract on July 06 2015 at 14:38:15 hrs the Noticee entered into a buy trade with counterparty Blow Agency Pvt Ltd for 17 500 units at ₹5 per unit. At 14:38:20 hrs the Noticee entered into a sell trade with the same counterparty for 17 500 units at ₹16.50 per unit. Adjudication Order in respect of Radha Devi Banka in the matter of dealings in Illiquid Stock Options at BSE The Noticee’s two trades while dealing in the above said contract during the investigation period allegedly generated artificial volume of 35 000 units which made up 13.36% of total market volume in the said contract during this period. 9. In view of the foregoing it is alleged that Noticee by indulging in execution of non genuine reversal of trades in Stock Options with same entities on the same day created false and misleading appearance of trading in stock options and therefore allegedly violated Regulation 3(a)(c)4(1) 4(2)(a) of PFUTP Regulations 2003. 6. The SCN was served on the Noticee via Registered Post Acknowledgement Due hereinafter referred to as “RPAD”) and via email dated July 09 2021. Thereafter the Noticee vide email dated August 24 2021 submitted the following: 6.1 That the Noticee acted as bonafide trader investor and have transacted in stock option segment in normal course of dealing and her trading in the same was very much within her own financial and risk. 6.2 That in any business activity in stock market one can either make profit or loss that at the relevant time she had no idea of any profit or loss in said transaction and that she traded in option segment taking into account her ‘risk and reward ‘parameters. 6.3 That she was not connected to the counterparty of her transaction in the option segment and neither did she have any relation with promoters directors key management person of underlying scrips in cash segment. In this regard the Noticee relied on the judgments of the Hon’ble Securities Appellate Tribunal hereinafter referred to as “SAT”) in the matters of Jagruti Securities LtdS P J Stock Brokers Pvt Ltdand Saroj & Co. proprietor Sanjay AgrawalLtd. And orsdecided on June 15 2007. Adjudication Order in respect of Radha Devi Banka in the matter of dealings in Illiquid Stock Options at BSE 7. In the interest of natural justice and in terms of the Adjudication Rules the Noticee was provided with an opportunity of personal hearing in the matter on September 07 2021 through the online Webex platform. Mr. Ankit Daga Chartered Accountant appeared as the Authorised Representativeon behalf of the Noticee on the stipulated date of hearing. During the course of the hearing the AR reiterated the submissions made by the Noticee in her reply dated August 24 2021. The AR mentioned about a delay of approximately 6 years in issuing the SCN and quoted the judgment of the SAT in the matter of Ashlesh Gunvantbhai Shah in this regard. Further the AR mentioned that considering the case of Bhavesh Pabarithe penalty provided under section 15HA can be waived or further reduced from the minimum penalty prescribed under the Act by keeping in view the circumstance prescribed under section 15J. Therefore the AR requested that no penalty should be levied and if any penalty is levied then the same should be bare minimum and less than the penalty prescribed under the section. The AR also requested time to submit additional written submissions and the said request was acceded to by the 8. Vide email dated September 20 2021 the AR submitted a scanned copy of letter dated September 15 2021. The Noticee reiterated the decisions of the Hon’ble SAT in the case of Ashlesh Gunvantbhai Shah with respect to the delay in issuance of SCN and of the Hon’ble Supreme Court of India in the case of Bhavesh Pabari regarding waiving penalty or reducing penalty below the minimum prescribed under section 15HA of SEBI Act. Further the Noticee laid emphasis to Section 15J of SEBI Act which needs to be taken into account while adjudging penalty. It was also mentioned that from the alleged transactions neither any loss was caused to an investor or group of investors nor the transaction was of repetitive nature as there was only one transaction. It was submitted that the Noticee is a senior citizen. The profit from the alleged transactions was very minimal only ₹2 01 250 . Adjudication Order in respect of Radha Devi Banka in the matter of dealings in Illiquid Stock Options at BSE Therefore no penalty should be levied and in case penalty is levied it should be commensurate with alleged offence. CONSIDERATION OF ISSUES AND FINDINGS I have taken into consideration the facts and circumstances of the case the material documents made available on record and the submissions of the Noticee. The issues that arise for consideration in the instant case are : a) Whether the Noticee has violated the provisions of Regulations 3(b) c) 4(1) and 4(2)(a) of PFUTP Regulations 2003 b) Does the violation if any attract monetary penalty under section 15HA of the SEBI Act c) If so what would be the quantum of monetary penalty that can be imposed on the Noticee after taking into consideration the factors mentioned in section 15J of the SEBI Act 10. Before advancing into the merits of the case I would like to deal with the issue pertaining to the delay as alleged by the Noticee in SEBI not discharging its obligations of quick investigation. 11. I note that there is no provision under SEBI Act which prescribes a time limit for taking cognizance of a breach of the provision of SEBI Act and Rules and Regulations made thereunder. Further as per Section 11C of SEBI Act SEBI can initiate investigation at any point of time for any period of alleged violation or any period of alleged transactions. 12. In this regard I feel it is pertinent to note that in the matter of SEBI Vs Bhavesh PabariSCC Online SC 294 the Hon’ble Supreme Court of India has inter alia observed as follows: “There are judgments which hold that when the period of limitation is not prescribed such power must be exercised within a reasonable time. What would Adjudication Order in respect of Radha Devi Banka in the matter of dealings in Illiquid Stock Options at BSE be reasonable time would depend upon the facts and circumstances of the case nature of the default statute prejudice caused whether the third¬party rights had been created etc.” 13. Further I note that the Hon’ble SAT in the matter of Pooja Vinay Jain vs. SEBI Appeal No. 1519 Date of Decision 17.03.2020) held that “The record would show that all the documents concerning the defense of the appellant were filed by her before the AO. Therefore for want of any prejudice the proceedings cannot be quashed simply on the ground of delay in launching the same”. 14. I also note that the Hon’ble SAT in the matter of Bipin R Vora vs. SEBI held that “As regards the plea of delay and latches and submission that the show cause notice is barred by limitation I do not find any merit in these contentions as the time and efforts involved in an investigation though may vary from case to case generally investigations per se is a time consuming process which invariably involve collection scrutiny and careful examination of voluminous records order trade details of all the concerned including the exchanges recording of statements etc. and therefore no time limit can be fixed in this regard to enable a regulator to take appropriate disciplinary action for the safeguard and improvement of the system market”. 15. I note that the investigations relating to the PFUTP Regulations 2003 are complex considering the volume of transactions connections and examination of trading of shares etc.) and time consuming. In the instant matter I note that a total of 14 720 entities were involved in the generation of artificial volume by executing non genuine reversal trades in the illiquid Stock Options segment at BSE during the investigation period. Initiation of proceedings against the said 14 720 entities is a humungous task and therefore considering the available resources the proceedings were initiated against the entities in a staggered manner. I also note that SEBI had framed a settlement scheme in accordance with the provisions of the SEBIRegulations 2018 which provided a onetime opportunity to the concerned entities to settle the proceedings in the matter of Adjudication Order in respect of Radha Devi Banka in the matter of dealings in Illiquid Stock Options at BSE dealings in illiquid Stock Options at BSE. I observe that the said scheme was kept open for a period of initially 3 monthsand then extended till December 31 2020 to enable the entities to avail the benefit of the scheme in view of the disruptions caused due to the Covid 19 pandemic. A total of 1 018 entities had availed the benefit of the Scheme and remitted the specified settlement amounts and a Settlement Order was passed by SEBI on January 15 2021. Subsequently proceedings against remaining entitieswere proceeded with and accordingly the SCN was issued against the Noticee. 16. In view of the aforesaid and considering the facts of the present matter I do not find any merit in the aforesaid contentions of the Noticee. 17. With respect to the alleged violations in the instant matter I note that it is pertinent to refer to the relevant provisions of the PFUTP Regulations 2003 which are reproduced as follows: PFUTP Regulations 2003 3. Prohibition of certain dealings in securities No person shall directly or indirectly— a) buy sell or otherwise deal in securities in a fraudulent manner b) use or employ in connection with issue purchase or sale of any security listed or proposed to be listed in a recognized stock exchange any manipulative or deceptive device or contrivance in contravention of the provisions of the Act or the rules or the regulations made there under c) employ any device scheme or artifice to defraud in connection with dealing in or issue of securities which are listed or proposed to be listed on a recognized stock exchange Adjudication Order in respect of Radha Devi Banka in the matter of dealings in Illiquid Stock Options at BSE engage in any act practice course of business which operates or would operate as fraud or deceit upon any person in connection with any dealing in or issue of securities which are listed or proposed to be listed on a recognized stock exchange in contravention of the provisions of the Act or the rules and the regulations made there under. 4. Prohibition of manipulative fraudulent and unfair trade practices 1) Without prejudice to the provisions of regulation 3 no person shall indulge in a fraudulent or an unfair trade practice in securities. 2) Dealing in securities shall be deemed to be a 6[manipulative] fraudulent or an unfair trade practice if it involves fraud and may include all or any of the following namely : in the securities market a) indulging in an act which creates false or misleading appearance of trading 18. I note that the allegation against the Noticee is that while dealing in the stock option contracts at BSE during the Investigation Period the Noticee had executed reversal trades which were allegedly non genuine trades and the same had resulted in generation of artificial volume in stock options contracts at BSE. Reversal trades are considered as those trades in which an entity reverses its buy or sell positions in a contract with subsequent sell or buy positions with the same counterparty during the same day. The said reversal trades are alleged to be non genuine as they are not executed in the normal course of trading lack basic trading rationale lead to false or misleading appearance of trading in terms of generation of artificial volumes and hence are deceptive and manipulative. 19. I note from the trade log of the Noticee that the Noticee had traded in 1 unique contract in stock options segment of BSE during the Investigation Period. It is observed that the Noticee had executed 2 non genuine trades in 1 contract. I further note that the above mentioned trades of the Noticee had resulted in the Adjudication Order in respect of Radha Devi Banka in the matter of dealings in Illiquid Stock Options at BSE creation of artificial volume of a total of 35 000 units in the said 1 contract. The summary of the non genuine trades of the Noticee are as follows: Contract Name Avg Buy Buy Qty Avg Sell Sell Qty of non of artificial of artificial Rate No. of Rate No. of of noticee in the generated by generated by in ₹) in ₹) noticee in the noticee in the the contract to noticee’s total total volume trades in the volume in the 17 500 17 500 20. It is noted that the Noticee had executed non genuine trades in 1 contract wherein the percentage of non genuine trades of the Noticee to the total trades in the contract was 25%. Further the artificial volume generated by the Noticee in the contract amounted to a substantial 100% of total volume generated by her in the contract. It is also noted that artificial volume generated by the Noticee contributed 13.36% to the total volume from the market in the said contract. The non genuine trades executed by the Noticee in the above contract had significant difference between buy and sell rates considering that the trades were reversed on the same 21. Upon perusing the trade log I note that the trades executed by the Noticee in the contract were squared up within a short span of time with the same counterparty. To illustrate on July 06 2015 at 14:38:15.691986 the Noticee placed a buy limit order for 17 500 units at a price of ₹5.00 per unit and the said order was matched with the sell limit orderof counterparty client Blow Agency Private Limited. I note that the said sell limit order was placed at 14:38:15.676178 i.e. before the entry of the buy limit order by the Noticee. I also note that there was no modification of either price or quantity by either the Noticee or the counterparty and the buy limit order of the Noticee got executed into trade immediately upon its entry. Subsequently at 14:38:20.285526 Adjudication Order in respect of Radha Devi Banka in the matter of dealings in Illiquid Stock Options at BSE the Noticee placed a sell limit order for 17 500 units at a price of ₹16.50 per unit and the said order was matched with the same counterparty who placed a buy limit order for the same quantityand price indicates a prior meeting of minds with a view to execute the reversal trades at a predetermined price. Since these trades were done in illiquid option contracts there was very little trading in the said contract and hence there was no price discovery in the strictest terms. The wide variation in prices of the said contracts within a short span of time is a clear indication that there was pre determination in the prices by the counterparties while executing the trades. Therefore it is observed that the Noticee had indulged in reversal trades with her counterparty in the stock options segment of BSE and the same were non genuine trades. 23. With regard to the contention of the Noticee that there was no major movement in price of underlying scrip on account of her trading in the options of the scrip I note that the SCN issued to the Noticee did not allege that on account of the trading of the Noticee in the options there was a major movement in the price of the underlying scrip. Instead the SCN alleged the execution of non genuine reversal trades in the illiquid stock options at BSE which has been detailed above. Therefore I do not find any merit in the contentions of the Noticee in this regard. Adjudication Order in respect of Radha Devi Banka in the matter of dealings in Illiquid Stock Options at BSE 24. With regard to the contention of the Noticee that the allegation of creation of artificial or reversal trade is of no consequence in the option segment of the exchange I wish to rely on the following observations of the Hon’ble Supreme Court in the matter in respect of SEBI v Rakhi Trading Private Limitedin which the Hon’ble Supreme Court has held the following: “The stock market is not a platform for any fraudulent or unfair trade practice. The field is open to all the investors. By synchronization and rapid reverse trade as has been carried out by the traders in the instant case the price discovery system itself is affected. Except the parties who have pre fixed the price nobody is in the position to participate in the trade. It also has an adverse impact on the fairness integrity and transparency of the stock market.” Therefore I do not find any merit in the contentions of the Noticee in this regard. 25. The Noticee has contended that the alleged 2 trades were carried out on the anonymous screen based trading platform provided by BSE where the identity of the counterparty remains inaccessible to all and hence the question of any non genuine trade did not arise at all unless it was proved that such trades were executed by the Noticee in connivance with any counterparty. In this regard I place reliance on the judgment of Hon’ble Supreme Court in the matter in respect of SEBI v Rakhi Trading Private Limitedin which the Hon’ble Supreme Court has held the following: “Considering the reversal transactions quantity price and time and sale parties being persistent in number of such trade transactions with huge price variations it will be too naive to hold that the transactions are through screen based trading and hence anonymous. Such conclusion would be over looking the prior meeting of minds involving synchronization of buy and sell order and not negotiated deals as per the board s circular. The impugned transactions are manipulative Adjudication Order in respect of Radha Devi Banka in the matter of dealings in Illiquid Stock Options at BSE deceptive device to create a desired loss and or profit. Such synchronized trading is violative of transparent norms of trading in securities.....” 26. Therefore I find that it cannot be a mere coincidence that Noticee could match its trades with the same counterparty with whom she had undertaken first leg of the respective trades. It indicates meeting of minds. In this context I would also like to rely on the judgment of the Hon’ble Supreme Court of India in SEBI Vs Kishore R Ajmerawherein it was held that “…in the absence of direct proof of meeting of minds elsewhere in synchronized transactions the test should be one of preponderance of probabilities as far as adjudication of civil liability arising out of the violation of the Act or provision of the Regulations is concerned. The conclusion has to be gathered from various circumstances like that volume of the trade effected the period of persistence in trading in the particular scrip the particulars of the buy and sell orders namely the volume thereof the proximity of time between the two and such other relevant factors. The illustrations are not exhaustive...” 27. The Hon’ble Supreme Court of India further held in the same matter that “…It is a fundamental principle of law that proof of an allegation levelled against a person may be in the form of direct substantive evidence or as in many cases such proof may have to be inferred by a logical process of reasoning from the totality of the attending facts and circumstances surrounding the allegations charges made and levelled. While direct evidence is a more certain basis to come to a conclusion yet in the absence thereof the Courts cannot be helpless. It is the judicial duty to take note of the immediate and proximate facts and circumstances surrounding the events on which the charges allegations are founded and to reach what would appear to the Court to be a reasonable conclusion therefrom. The test would always be that what inferential process that a reasonable prudent man would adopt to arrive at a conclusion.” Adjudication Order in respect of Radha Devi Banka in the matter of dealings in Illiquid Stock Options at BSE 28. In the instant matter I note that though direct evidence regarding meeting of minds or collusion of the Noticee with the counterparty is not forthcoming the trading behavior of the Noticee makes it clear that the aforesaid non genuine trades could not have been possible without meeting of minds at some level. In this context I find it pertinent to refer to the Hon’ble SAT Order dated July 14 2006 in the matter of Ketan Parekh Vs SEBIwherein the Hon’ble SAT has held that “…The nature of transactions executed the frequency with which such transactions are undertaken the value of the transactions the conditions then prevailing in the market are some of the factors which go to show the intention of the parties. This list of factors in the very nature of things cannot be exhaustive. Any one factor may or may not be decisive and it is from the cumulative effect of these that an inference will have to be drawn.” 29. Additionally the Hon’ble SAT in its judgment dated September 14 2020 in the matter of Global Earth Properties and Developers Pvt. Ltd. Vs SEBIrelied upon the aforesaid judgment of the Hon’ble Supreme Court and held that “…It is not a mere coincidence that the Appellants could match the trades with the counter party with whom he had undertaken the first leg of respective trade. In our opinion the trades were non genuine trades and even though direct evidence is not available in the instant case but in the peculiar facts and circumstances of the present case there is an irresistible inference that can be drawn that there was meeting of minds between the Appellants and the counter parties and collusion with a view to trade at a predetermined price.” 30. Further with regard to the submission of the Noticee regarding no penalty to be imposed or imposition of penalty lower than the minimum prescribed under Section 15HA of SEBI Act against the Noticee in the instant matter since the Noticee executed 2 trades in 1 unique contract I wish to rely on the judgment dated November 24 2021 of the Hon’ble SAT in the matter of Radha Malani vs. SEBI appeal no. 6921) wherein the Hon’ble SAT has observed the following: Adjudication Order in respect of Radha Devi Banka in the matter of dealings in Illiquid Stock Options at BSE “Having heard the learned counsel for the appellant in our view the controversy involved in the present appeal is squarely covered by a decision of this Tribunal in Global Earth Properties and Developers Pvt. Ltd. vs. SEBI(b) (d) 4(1) and 4(2)(a) of PFUTP Regulations 2003 by the Noticee stands established. The Hon’ble Supreme Court of India in the matter of SEBI Vs Shri Ram Mutual Fund 68 SCL 216(SC) held that “…In our considered opinion penalty is attracted as soon as the contravention of the statutory obligation as contemplated by the Act and the Regulations is established and hence the intention of the parties committing such violation becomes wholly irrelevant..” 32. In view of the aforesaid judgment of the Hon’ble Supreme Court I am convinced that in the instant matter the Noticee is liable for monetary penalty under the provisions of section 15HA of the SEBI Act which reads as follows: Penalty for fraudulent and unfair trade practices 15HA. If any person indulges in fraudulent and unfair trade practices relating to securities he shall be liable to a penalty which shall not be less than five lakh rupees but which may extend to twenty five crore rupees or three times the amount of profits made out of such practices whichever is higher. Adjudication Order in respect of Radha Devi Banka in the matter of dealings in Illiquid Stock Options at BSE 33. While determining the quantum of penalty under section 15 HA of the SEBI Act it is pertinent to consider the relevant factors stipulated in section 15J of the SEBI Act which reads as under : Factors to be taken into account while adjudging quantum of penalty 15J. While adjudging quantum of penalty under 15 I the adjudicating officer shall have due regard to the following factors namely: a) the amount of disproportionate gain or unfair advantage wherever quantifiable made as a result of the default b) the amount of loss caused to an investor or group of investors as a result of c) the repetitive nature of the default. the default Explanation.—For the removal of doubts it is clarified that the power of an adjudicating officer to adjudge the quantum of penalty under sections 15A to 15E clauses and of section 15F 15G 15H and 15HA shall be and shall always be deemed to have been exercised under the provisions of this 34. I observe that the instant matter is concerned with the creation of artificial volume through the execution of reversal non genuine trades and hence I am of the view that it is not necessary to deal with the unfair gains made or losses avoided by the 35. Therefore I note that the Noticee indulged in execution of reversal trades in stock options on BSE in the Investigation Period which were non genuine and created false and misleading appearance of trading in terms of artificial volumes in stock options leading to violation of regulation 3(a) (c) 4(1) and 4(2)(a) of PFUTP Regulations 2003. Noticee. 36. After taking into consideration all the facts and circumstances of the case the material documents made available on record including the submissions of the Adjudication Order in respect of Radha Devi Banka in the matter of dealings in Illiquid Stock Options at BSE Noticee the factors mentioned in section 15J of the SEBI Act and in exercise of the power conferred upon me under section 15 I of the SEBI Act read with rule 5 of the Adjudication Rules I hereby impose a penalty of ₹5 00 000 on the Noticee viz. Ms. Radha Devi Banka under section 15HA of the SEBI Act for the violation of regulation 3(a) (c) 4(1) and 4(2)(a) of PFUTP Regulations 2003. I am of the view that the said penalty is commensurate with the lapse omission committed by the Noticee. 37. The Noticee shall remit pay the said amount of penalty within 45days of the receipt of this order either by way of Demand Draftin favour of “SEBI Penalties Remittable to Government of India” payable at Mumbai or through online payment facility available on the website of SEBI i.e. www.sebi.gov.in i.e. ENFORCEMENT Orders Orders of AO PAY NOW. 38. The Noticee shall forward the aforesaid DD payment confirmation details to the Division Chief Enforcement Department I Division of Regulatory Action IV SEBI Bhavan II Plot No.C7 A ‘ G’ Block Bandra Kurla Complex Bandra Mumbai 400 051 and also send an email to tad@sebi.gov.in with the following detail: Name of the ‘Payer Noticee’ along with PAN of Noticee Case Name Date of Payment Amount Paid Transaction No. Bank Name and Account No. Purpose of payment Adjudication Order in respect of Radha Devi Banka in the matter of dealings in Illiquid Stock Options at BSE 39. In the event of failure to pay the aforesaid amount of penalty within 45 days of receipt of this Order recovery proceedings may be initiated under section 28A of the SEBI Act for realization of the said penalty amount along with interest thereon inter alia by attachment and sale of movable and immovable properties. 40. In terms of Rule 6 of the Adjudication Rules a copy of this order is sent to the Noticee and SEBI. Date: January 17 2022 ANSUMAN DEV PRADHAN Place: MUMBAI ADJUDICATING OFFICER Adjudication Order in respect of Radha Devi Banka in the matter of dealings in Illiquid Stock Options at BSE 

Summary: It is judicial duty to take immediate and proximate facts into evidence to reach a reasonable conclusion – The SECURITIES AND EXCHANGE BOARD OF INDIA It is judicial duty to take immediate and proximate facts into evidence to reach a reasonable conclusion in a way an reasonable man would adopt to arrive one and applying the method the noticee was found to be indulged in not genuine trades and was the acts were found violative under section 15HA of the SEBI Act for the violation of regulation 3(a), (b), (c), (d), 4(1) and 4(2)(a) of PFUTP Regulations, 2003. the case was adjudicated by ANSUMAN DEV PRADHAN adjudicating officer in ADJUDICATION ORDER NO.: Order/AP/SS/2021-22/14720. The facts of the case were that the Securities and Exchange Board of India (SEBI) conducted investigation into the trading activity in illiquid stock options on Bombay Stock Exchange Limited (BSE) for the period April 01, 2014, to September 30, 2015, observing large scale reversal of trades in the Stock Options segment of the BSE. Pursuant to investigation, it was observed that during the period, total of 2,91,744 trades comprising substantial 81.40% of all the trades executed in stock options segment of BSE were non genuine trades. The non genuine trades resulted into creation of artificial volume in stock options segment of BSE during the IP. It was observed that Ms. Radha Devi Banka (Noticee) was one of the various entities who indulged in execution of reversal trades in stock options segment of BSE during the IP. Such trades were observed to be non-genuine in nature and created false and misleading appearance of trading in terms of artificial volumes in stock options segment and therefore were alleged to be manipulative, deceptive in nature In view of the same, SEBI initiated adjudication proceedings against the Noticee for violation of the provisions of Regulations 3(a), (b), (c), (d), 4(1) and 4(2)(a) of SEBI (Prohibition of Fraudulent and Unfair Trade Practices) Regulations, 2003 (PFUTP Regulations, 2003). SEBI appointed the undersigned as Adjudicating Officer under Section 15-I of the Securities and Exchange Board of India Act, 1992 (SEBI Act, 1992) read with Rule 3 of the SEBI (Procedure for Holding Inquiry and Imposing Penalties) Rules, 1995 (Adjudication Rules, 1995) to inquire against the noticee for the alleged violations of PFUTP Regulations, 2003 The adjudicating officer notices that the Noticee had executed reversal trades which were the non-genuine trades and the same led to the generation of artificial volume in stock options contracts at BSE and it is also noted that the matching of trades cannot be a mere coincidence and it shows that there is a clear meeting of minds because non-genuine trades cannot be conducted without meeting of minds at some level. After taking all the facts and circumstances into notice the officer is of the view that the Noticee indulged in execution of reversal trades in stock options on BSE in the Investigation Period which were non-genuine and created false and misleading appearance of trading in terms of artificial volumes in stock options, leading to violation of regulation 3(a), (b), (c), (d), 4(1) and 4(2)(a) of PFUTP Regulations, 2003. And imposed a penalty of ₹5,00,000/- on the noticee