Vastavam web: Markets regulator Sebi today imposed a penalty of Rs 16 lakh on two individuals for indulging in fraudulent trading activities. In three separate but similarly worded orders, the regulator imposed a total fine of Rs 10 lakh on Sunil Purohit and Rs 6 lakh on Haresh Posnak for violation of PFUTP (Prohibition of Fraudulent and Unfair Trade Practices).
In Purohit case, Sebi had conducted probe into the alleged irregularity in the trading in shares of Today’s Writing Products Ltd (TWPL) and K Sera Sera Productions during December 2003 to February 2004 and from May to July 2005, respectively. Sebi found that the two individuals along with other entities indulged in circular and synchronised trades and thereby created increased artificial volume and entered into transaction in securities without intention of change of beneficial ownership of such securities.
Synchronised or circular trading refers to a practice where the seller and buyer have an understanding between them on trading of specific shares. By indulging in such transactions, the duo violated PFUTP regulations, Securities and Exchange Board of India (Sebi) said and imposed fine on them.