In Brief
SEBI appealed against Securities Appellate Tribunal decisions setting aside penalties imposed on three traders and three brokers for synchronized and reverse trading in the derivatives segment. The Supreme Court held that such synchronized reverse trades constitute fraudulent and unfair trade practices under SEBI Regulations even if they do not directly manipulate broad market indices. The Court found that when traders book consistent profits while counterparties book losses through trades executed within seconds at significant price variations, without underlying price movement, this indicates orchestrated non-genuine trading. The Court restored SEBI's orders against the traders but upheld SAT's dismissal of charges against brokers, finding insufficient evidence of broker complicity in anonymous screen-based trading systems.
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