SEBI v. Finquest Securities Pvt Ltd (broker and circular trades in Seshasayee Paper, 2022)

Dismissed

✓ Checked against the primary document on October 8, 2026. The library's summary, tags and figures for this record were compared with the regulator's own document by an AI model (Claude) following written instructions, in a single reading of the order; an independent second reading of 60 SEBI records agreed on every field for 56, the four misses being penalty amounts; a later sample of 50 of the SEBI records added on 9 October agreed on every field for 46. No lawyer has reviewed them. A checked record can still contain errors, and checked does not mean endorsed. See how we check records or report a correction.

Report an error in this record (sebi-64337-wash-trading-2022) by email

On 25 October 2022 a SEBI whole-time member disposed of an enquiry that had recommended cancelling the registration of stockbroker Finquest Securities for facilitating clients' circular trades in Seshasayee Paper and Boards shares. He gave no direction because the Securities Appellate Tribunal and Supreme Court had already cleared the clients of the same trades.

The record

What was ordered

Civil penalty

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Disgorgement

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Prejudgment interest

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Total relief

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Alleged gain

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A dash means the release did not state a figure we could extract, not that the figure is zero. Penalty and disgorgement are stored separately so aggregates across the library do not double-count the same dollars.

What is alleged to have happened

Finquest Securities Pvt Ltd is a stockbroker that was the subject of an enquiry under SEBI's rules for intermediaries. The designated authority's report recommended cancelling its registration, and a show cause notice of October 2020 put that recommendation to the broker. The matter concerns trading in Seshasayee Paper and Boards Ltd between December 2011 and October 2014.

SEBI alleged that four connected clients, drawn from a wider group of sixteen linked to Bharat Patel, executed circular trades in the stock on NSE and BSE with no real change of ownership, accounting for about 21 percent of volume on NSE and 25 percent on BSE. The report found that Finquest was their broker, was connected to the group, and had thereby helped carry out the scheme in breach of section 12A of the SEBI Act, the fraud-prevention rules in the PFUTP Regulations and the stockbroker code of conduct.

The whole-time member noted that SEBI had in March 2020 barred the four clients for two years for the same four circular trades, but that the Securities Appellate Tribunal set that order aside in September 2020 and the Supreme Court dismissed SEBI's appeal in December 2020. Both rulings came after the report was written. Since the clients stood cleared of the underlying trades, the order holds the broker cannot be held responsible for executing them.

The show cause notice was therefore disposed of without any direction, no penalty and no restriction on the broker's registration.

The record does not show whether SEBI took any further step against the broker or the wider group, and the order makes no finding on the merits of the circular-trading allegation.

This library tags the matter as wash trading (alleged circular trades). The tagging is ours, not the regulator's.

For the regulator's own account of the facts, read the primary document linked above. This page deliberately summarises the structured record rather than reproducing the order.

What technique is this, and how does it work?

This action is tagged with one technique in our taxonomy. The tagging is ours: regulators charge statutory provisions, not technique names, so the mapping is an editorial judgement described in our editorial policy.

• Wash trading — see how it works, what statute it engages, and every other action tagged the same way.

Timeline

1. 2022-10-25 SEBI order

Primary documents

Everything on this page derives from the documents below. Where our summary and the primary document disagree, the primary document is right.

• SEBI order

The linked release is published by the issuing regulator under its own terms. Our summary and narrative above are our own writing.

Related actions

Other actions in the library sharing at least one technique tag with this one.

Record added October 8, 2026. submit a correction.