SEBI Cracks Down on Market Manipulators: Fastino Dealers Hit with Rs 5 Lakh Penalty for Artificial Volume in Options

SEBI Cracks Down on Market Manipulators: Fastino Dealers Hit with Rs 5 Lakh Penalty for Artificial Volume in Options​

The Securities and Exchange Board of India (SEBI) has concluded an adjudication order against Fastino Dealers Private Limited, confirming violations related to non-genuine trading activities. The ruling specifically targets the creation of artificial volume through manipulative trades in the illiquid stock options segment at the Bombay Stock Exchange (BSE).

The order, dated April 20, 2026, confirms that the firm was penalized for engaging in practices deemed deceptive and manipulative during the period between April 1, 2014, and September 30, 2015.

SEBI Investigation Unmasks Illiquid Options Manipulation​

SEBI initiated the investigation after observing a large-scale reversal of trades within the stock options segment of the BSE. These large-scale reversals were flagged by regulators for potentially creating artificial trading volume.

The investigation period covered 2,91,744 trades, of which SEBI alleged that 81.40% were non-genuine. Fastino Dealers Private Limited was identified as one of the key entities involved in executing these purported reversal trades, which led to the generation of false or misleading trading volumes.

The regulatory body consequently initiated adjudication proceedings against Fastino Dealers Private Limited for alleged violations of key provisions of the SEBI (Prohibition of Fraudulent and Unfair Trade Practices Relating to Securities Market) Regulations, 2003.

Evidence Points to Collusive Reversal Trades​

The adjudication order found that the Noticee executed several specific trades that exhibited clear signs of manipulation. The core allegation revolved around reversal trades, where an entity reverses its buy or sell position with the same counterparty on the same day.

Specifically, the inquiry detailed that the Noticee executed 4 non-genuine trades within a single stock options contract, generating an artificial volume of 1,00,000 units. These trades were analyzed for lacking any basic trading rationale or commercial basis.

The evidence demonstrated that the trades were executed in a precise, synchronized manner with the counterparty. The report highlighted that the wide variation in prices for the contract within a short span of time was a clear indication of pre-determination by the counterparties.

Legal Precedent Establishes Element of Collusion​

The adjudication findings drew heavily on judicial precedents, emphasizing that the test for such violations must rely on the preponderance of probabilities. The order cited judgments from the Supreme Court and the Securities Appellate Tribunal (SAT).

These legal references established that the highly synchronized nature of the trades—including the same counterparty, same quantity, and rapid buy/sell sequencing—strongly indicates a prior meeting of minds. The order concluded that such activity goes beyond merely utilizing the electronic trading system.

Based on these facts and the surrounding circumstances, SEBI determined that the Noticee had indulged in reversal trades, constituting non-genuine transactions and creating the appearance of artificial volumes.

Monetary Penalty Imposed for Fraudulent Practices​

After considering the violation of Regulations 3(a), (b), (c), (d), and Regulation 4(1) and 4(2)(a) of the PFUTP Regulations, SEBI determined that a monetary penalty was warranted under Section 15HA of the SEBI Act, 1992.

The final order, issued by the Adjudicating Officer, officially imposed a penalty of Rs 5,00,000/- (Rupees Five Lakhs only) on Fastino Dealers Private Limited.

The penalty was deemed commensurate with the violation and the lapse observed in the trading practices. The Noticee was directed to remit the penalty amount within 45 days of receiving the order. Failure to comply could lead to consequential recovery proceedings under SEBI guidelines.