SEBI v. 768 applicants (ISO Settlement Scheme 2024, reversal trades in BSE stock options)

Settled

✓ 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.

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In August 2024 SEBI issued one settlement order covering 768 entities that took up its ISO Settlement Scheme 2024 over reversal trades in illiquid BSE stock options. The annexure lists settlement amounts that add up to Rs 10,79,28,000, mostly Rs 1,20,000 or Rs 2,40,000 each, plus separate legal costs.

The record

What was ordered

Civil penalty

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Disgorgement

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Prejudgment interest

—

Total relief

—

Alleged gain

—

Penalty as published

108m INR

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. This regulator states penalties in INR. The figure is recorded as published and is not converted, so it does not appear in the USD totals or medians used elsewhere on this site.

What is alleged to have happened

Two SEBI whole-time members, Kamlesh C. Varshney and Ashwani Bhatia, passed this consolidated settlement order on 19 August 2024. It records settlements by 768 entities, listed in an annexure of names and PAN numbers, who chose to settle under a scheme SEBI framed under Regulation 26 of its settlement regulations. No individual entity is named on this record.

The background is SEBI's surveillance of the stock options segment of the Bombay Stock Exchange between April 2014 and September 2015. SEBI observed entities that consistently made large losses on trades that were reversed with the same counterparties on the same or next day, while others consistently profited. It found that 14,720 of 21,652 entities trading in that segment were involved in generating artificial volumes through non-genuine reversal trades in illiquid options, in alleged breach of the fraud and unfair trade practice regulations, and began adjudication proceedings against them.

After the Securities Appellate Tribunal twice invited SEBI to offer a scheme for this class of cases, SEBI issued a public notice on 6 March 2024. The scheme ran from 11 March to 10 June 2024 after an extension. Entities paid a settlement amount, a registration amount and legal costs through an online platform, and 768 did so.

The order settles the pending proceedings for these entities, and SEBI agreed not to continue them or to start any further action for the same defaults, subject to the right to act if a representation is untrue or an undertaking is breached. From the annexure, 667 entities paid Rs 1,20,000, 99 paid Rs 2,40,000 and two paid larger sums, for a total of Rs 10,79,28,000 in settlement amounts; legal costs of Rs 13,570 were listed separately for some.

A settlement is not a finding of violation. The record does not show the trading of any individual applicant, the sums at stake in the underlying proceedings, how many entities in the wider group did not settle, or any criminal case. This record groups the settlement order, not the adjudication orders against individual entities.

This library tags the matter as wash trading and price manipulation. 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 2 techniques 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.
• Price manipulation — see how it works, what statute it engages, and every other action tagged the same way.

Timeline

1. 2024-08-19 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
• Order (PDF)

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.