Biocon case: Sebi bans 6 entities for 2 yrs for manipulative trades

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The Securities and Exchange Board of India has banned six entities from the capital markets for two years for indulging in manipulative trading in the shares of Biocon Limited in the cash market.

These six entities include– Gangwal Sunil Kumar, Vihit Investment, Mohd Faisal, AKG Securities and Consultancy, Paramount Incorporation, and Minesh Jormalbhai Mehta (collectively referred to as noticees).

The regulator has also imposed a penalty of Rs 10 lakh each on them. The penalty needs to be paid within 45 days.

Sebi had conducted an investigation into the trading activities of certain entities in the scrip of Biocon.

The purpose of the investigation was to ascertain whether there was any violation of the securities laws by certain entities in the cash market on June 29, 2017, at NSE.

The focus was to find if there was a violation done to benefit certain entities who were holding net long positions in the derivative contracts.

The regulator body, in its probe, found that all the six entities had engaged in price manipulation in the scrip of Biocon at NSE cash market during the last half an hour on June 29, 2017, and managed to establish higher settlement price in the futures of Biocon.

These four entities had taken the long positions to increase their profit arising out of their long positions, it added.

In addition, the regulator has directed these four entities to disgorge the unlawful gains made by them along with an interest of 12 per cent per annum.

The Sebi has noted that all the six entities violated the provisions of Prohibition of Fraudulent and Unfair Trade Practices(PFUTP ) norms by indulging in such trades.