₹4.83 crore fraud in the name of trading, SEBI imposed a three-year ban on two accused
Stock Market: SEBI has banned Shivprasad Pattiya and Alkesh Narware for three years for committing fraud in the stock market. Both of them had made illegal earnings of ₹4.83 crore by misleading investors in the name of algo trading, after which SEBI took action in the case and has also ordered to recover this amount with interest.
Securities and Exchange Board of India (SEBI), the stock market regulator, has barred two persons, namely Shivprasad Pattiya and Alkesh Narware, from the stock market for three years in the case of cheating investors. Apart from this, an order has also been passed for the recovery of illegal earnings worth Rs 4.83 crore with interest from both individuals.
It came out in the course of the inquiry by SEBI that both the defendants had cheated the investors by undertaking fraudulent transactions in 'Out of the Money' (OTM) options. These persons would gain control over the trading accounts of the investors through WhatsApp groups by providing guaranteed returns by virtue of algorithmic trading. Then money was transferred by them from these accounts into their own controlled accounts.
In this case, SEBI has said that this action is a message to protect investors and maintain the integrity of the market, apart from stopping false earnings. The statement issued said that if any person tries to cheat investors by giving fake behavior, the lure of big earnings, then they will have to face strict action and serious consequences.
SEBI took strict action against both the accused. Under this, SEBI has banned both the accused from trading in the stock market for three years. Both have also been directed to pay a fine of ₹ 25 lakh each, which will have to be paid within 45 days. Along with this, SEBI has imposed a fine of ₹ 4.83 crore in this. The company has also been ordered to recover the amount of Rs 10,000 along with 12% annual interest from February 2022.
It is worth noting that SEBI has accused Shivprasad Pattiya and Alkesh Narware of this duo of using WhatsApp groups to call people. They were lured with the facility of doing automated trading through algo trading, i.e. computer system and guaranteed returns. After this, they used to take the login details of their trading accounts from those investors, trade in OTM options in their name, and transfer the money to the accounts under their control. Illegal earnings of ₹ 4.83 crore were found in these accounts, which SEBI has ordered to be confiscated.
