Capital market regulator Securities and Exchange Board of India (Sebi) on Wednesday restrained 22 entiies, mostly brokers, from the securities market for their allegedly making illicit gains through manipulating illiquid stocks options.

Sebi found these entities executing 'reversal trades' in the stock options segment.


The manipulation typically took in deep in-the-money options and deep out-of-the-money options on individual stocks that were thinly traded. In fact, nearly 70-100 per cent of the volumes in these counters were by the alleged manipulators.

According to Sebi, entities through reversal tradesgenerated a total loss to the tune of Rs 1,273 crore and total profit to the tune of Rs 1,303 crore.

"These brokers have, prima-facie , facilitated their clients to use and employ a pre-meditated manipulative device or contrivance while dealing in securities market and indulged in non-genuine and deceptive transaction," said Rajeev Kumar Agarwal, Whole Time Member, Sebi in an order.

Some of the entities barred by Sebi include Giriraj Stock Broking, Best Bull Stock Trading, Odyssey Securities and Mousumi Deb Roy among others.

The move is part of a series of action taken by the market regulator against entities manipulating the stock exchange platform for avoid taxing or making illegal gains.

Sebi, however, has allowed the 22 entities to continue to function as stock brokers for their existing clients in the cash segment.

Sebi has asked exchanges to conduct a "focused inspection" of the involved trading members and take corrective, if required and submit a report to Sebi on the matter within six months.