SEBI has imposed a penalty of ₹5,00,000 on Nishaa Anand (PAN: AJWPA4527H) for fraudulent trading in illiquid stock options on BSE. This order, numbered Order/JS/VC/2025-26/31953 dated 07/01/2026, concludes a case stemming from trades executed in March 2015.
Background: The BSE Stock Options Investigation
SEBI initiated an investigation after observing large-scale trade reversals in illiquid stock options on BSE between April 1, 2014, and September 30, 2015. The investigation uncovered systematic manipulation:
- 2,91,744 reversal trades were identified
- These represented 81.41% of all trades in BSE’s stock options segment
- 14,720 entities participated in non-genuine trading
- Trades created artificial volumes with no genuine trading rationale
Nishaa Anand was among the entities identified for executing reversal trades that SEBI determined were manipulative and deceptive.
The Specific Trading Violation
The TDVR15MAR290.00CE Trades
On March 25, 2015, Nishaa Anand executed two trades that formed the basis of SEBI’s enforcement action:
Trade 1 (Buy):
- Time: 14:00:33 hours
- Counterparty: Priyasha Meven Finance Ltd.
- Quantity: 22,000 units
- Price: ₹14.6 per unit
- Value: ₹3,21,200
Trade 2 (Sell):
- Time: 14:05:52 hours
- Counterparty: Priyasha Meven Finance Ltd.
- Quantity: 22,000 units
- Price: ₹25.3 per unit
- Value: ₹5,56,600
Key Metrics:
- Time gap: 5 minutes 19 seconds
- Price increase: ₹10.7 per unit (73.3%)
- Artificial volume created: 44,000 units
- Percentage of total contract volume: 1.57%
Why SEBI Found the Trades Non-Genuine
The adjudicating officer identified four critical factors:
1. Absence of Commercial Rationale: No legitimate reason existed for reversing a complete position with the same counterparty within five minutes in an illiquid market.
2. Dramatic Price Movement Without Market Justification: A 73.3% price increase in five minutes in an illiquid contract indicates pre-determined pricing rather than genuine price discovery.
3. Exact Counterparty Matching: Both trades involved the same entity (Priyasha Meven Finance Ltd.), indicating coordination rather than anonymous screen-based matching.
4. Evidence of Prior Meeting of Minds: The precision in timing, quantity, and counterparty matching demonstrated pre-arrangement between parties despite the absence of direct evidence of communication.
Regulatory Violations Established
SEBI charged violations of the SEBI (Prohibition of Fraudulent and Unfair Trade Practices) Regulations, 2003:
Regulation 3 Violations
- 3(a): Dealing in securities in a fraudulent manner
- 3(b): Using manipulative or deceptive devices
- 3(c): Employing schemes to defraud
- 3(d): Engaging in practices operating as fraud or deceit
Regulation 4 Violations
- 4(1): Indulging in fraudulent or unfair trade practices
- 4(2)(a): Creating false or misleading appearances of trading
The Adjudication Timeline
Show Cause Notice and Service Attempts
October 27, 2021: SEBI issued the Show Cause Notice
Initial Service Failures:
- Speed Post returned with “Addressee left without instructions”
- August 8, 2022: Post-SCN Intimation about Settlement Scheme 2022 also undelivered
- March 6, 2024: Second intimation about Settlement Scheme 2024 undelivered
Alternative Service Methods:
- July 18, 2023: Service by affixture at last known address
- September 14, 2023: Publication in Hindustan Times (English) and Dainik Jagran (Hindi)
- July 10, 2025: Publication in Times of India and Gurgaon Mail
Settlement Opportunities Ignored
SEBI offered two settlement schemes,-
Settlement Scheme 2022: August 22, 2022 to January 21, 2023 (extended)
Settlement Scheme 2024: March 11, 2024 to June 10, 2024 (extended)
Nishaa Anand did not participate in either scheme.
Hearing Opportunities Not Utilized
July 31, 2023: First personal hearing scheduled, not attended
July 23, 2025: Second hearing (in-person or video-conference option), not attended
Complete Non-Engagement
Throughout proceedings from October 2021 to January 2026, Nishaa Anand:
- Never filed any reply to the SCN
- Never attended any hearing
- Never contacted SEBI
- Never participated in settlement
Legal Foundation for the Order
Presumption of Admission
The adjudicating officer applied precedents establishing that failure to respond creates a presumption of admission:
Sanjay Kumar Tayal v. SEBI (2014): SAT held that entities who neither reply to notices nor attend hearings are presumed to have admitted charges.
Classic Credit Ltd. v. SEBI (2006): Failure to file replies creates presumption of admission.
Dave Harihar Kirtibhai v. SEBI (2014): SAT criticized the pattern of non-response followed by appeals claiming natural justice violations.
Proving Manipulation Through Circumstances
SEBI v. Kishore R Ajmera (2016): The Supreme Court established that direct proof of coordination rarely emerges. The test is preponderance of probabilities based on trade volume, timing, quantities, prices, and persistence patterns.
SEBI v. Rakhi Trading Private Limited (2018): The Supreme Court specifically addressed reversal transactions, stating it would be naive to accept screen-based anonymity as defeating evidence of coordination when trading patterns show synchronization with huge price variations.
Ketan Parekh v. SEBI (2006): SAT held that once manipulation is established, it necessarily follows that investors were induced to trade, requiring no further proof of specific investor harm.
Strict Liability Framework
SEBI v. Shriram Mutual Fund (2006): The Supreme Court ruled that penalties attach immediately upon violation, making intent irrelevant. Breach of statutory obligations attracts penalties regardless of guilty intention.
Penalty Determination
Statutory Framework: Section 15HA
Minimum: ₹5,00,000
Maximum: Higher of ₹25,00,00,000 or three times the profits made
Section 15J Factors Considered
Disproportionate Gain: Not quantifiable from available records when considering both counterparties’ overall impact
Loss to Investors: Material on record did not allow quantification of specific investor losses
Repetitive Nature: No evidence of prior violations by Nishaa Anand
Why ₹5 Lakh Was Imposed
The adjudicating officer imposed the minimum penalty, reasoning:
“The two non-genuine trades entered by the Noticee in one options contract led to creation of artificial volumes which had the effect of distorting the market mechanism in the stock options segment of BSE. The violations were detrimental to the integrity of securities market, which should be dealt with suitable penalty.” The minimum amount reflected:
- Single contract involvement
- Relatively limited market impact (1.57%)
- Inability to quantify actual gains or losses
- No pattern of repeated violations
- Proportionality considerations
Payment Terms and Enforcement
Payment Requirements
Amount: ₹5,00,000 (Rupees Five Lakh only)
Deadline: 45 days from receipt of order
Method: Via SEBI website at www.sebi.gov.in → ENFORCEMENT → Orders → Orders of AO → PAYNOW
Consequences of Non-Payment
Recovery Under Section 28A:
- Attachment of movable properties
- Attachment of immovable properties
- Sale of attached properties
- Interest on unpaid amounts
- Treatment as tax arrears
Critical Lessons from This Case
Scale Doesn’t Determine Enforcement
Despite creating only 1.57% of the contract’s volume, SEBI pursued full enforcement. The case establishes there is no minimum threshold below which violations are overlooked.
Evasion Strategies Fail
Nishaa Anand’s apparent evasion through non-response and address changes didn’t prevent enforcement. SEBI has,-
- Used multiple service methods
- Proceeded ex-parte after proper notice
- Imposed full statutory minimum penalty
Anonymity of Electronic Trading Is Limited
The case confirms that screen-based trading doesn’t shield manipulation. Trading patterns revealing coordination overcome theoretical anonymity.
Non-Engagement Is Counterproductive
Complete failure to engage resulted in:
- Presumption of admission
- No opportunity to present mitigating circumstances
- Full minimum penalty without reduction
- Public adjudication order
Settlement Can Reduce Exposure
Two settlement opportunities over nearly two years went unused. Settlement typically offers:
- Reduced penalties
- Faster resolution
- Less public exposure
Intent Is Legally Irrelevant
Claims of not intending manipulation or not understanding regulations provide no defense. The violation itself attracts penalties.
Market Integrity Justifies Penalties Without Quantified Harm
The ₹5 lakh penalty was imposed despite inability to quantify specific gains or investor losses, because market integrity harm alone justifies enforcement.
Practical Guidance for Traders
High-Risk Trading Patterns to Avoid
Counterparty Reversals: Never reverse positions with the same counterparty in short timeframes, especially at significantly different prices
Volume Without Purpose: Avoid trades serving no genuine investment, hedging, or strategic purpose
Price Disconnection: Don’t execute trades at prices disconnected from reasonable market valuations
Coordinated Patterns: Never pre-arrange trade parameters with other parties
Essential Documentation
Maintain detailed records explaining:
- Business purpose for each trade
- Market analysis supporting decisions
- Strategic objectives being pursued
- Independent decision-making process
Responding to SEBI Communications
If You Receive Any Notice:
- Acknowledge receipt immediately
- Verify current contact information is on file
- Engage qualified securities law counsel
- Respond substantively within deadlines
- Attend all scheduled hearings
- Seriously evaluate settlement opportunities
- Never ignore communications hoping they disappear
Check SEBI’s Website: If you traded during 2014-2015, check www.sebi.gov.in under “Enforcement: Unserved Summons/Notices” for any pending notices.
Broader Investigation Context
Systematic Market Manipulation
The investigation revealing 81.41% non-genuine trades across 14,720 entities represents one of India’s largest market manipulation findings. SEBI’s comprehensive enforcement approach means:
- Thousands of cases are pending or concluded
- Similar trading patterns attract similar penalties
- The investigation fundamentally changed derivatives market surveillance
Market Reforms Implemented
Post-investigation, SEBI enhanced:
- Real-time surveillance for coordinated trading
- Algorithmic detection systems
- Beneficial ownership disclosure requirements
- Penalty structures and enforcement mechanisms
Frequently Asked Questions
Why did this case take over 10 years?
The trades occurred in March 2015, the SCN was issued in October 2021, and the order came in January 2026. The timeline reflects:
- Investigation of 14,720 entities requiring extensive analysis
- Multiple service attempts spanning years
- Settlement scheme opportunities
- Transfer between adjudicating officers
- Procedural requirements for ex-parte proceedings
Such timelines are typical for large-scale multi-entity investigations.
Could the penalty have been avoided?
Yes, through several paths:
- Substantive SCN response explaining legitimate business purposes
- Settlement participation (likely resulting in reduced penalties)
- Personal hearing attendance to present mitigating circumstances
- Legal representation identifying potential defenses
Complete non-engagement eliminated all these possibilities.
Can this order be appealed?
Yes, to the Securities Appellate Tribunal within 45 days. However:
- Complete non-engagement weakens appeal prospects
- SAT consistently upholds ex-parte orders with adequate notice
- Presumption of admission is difficult to overcome
- The minimum penalty shows restraint
Further appeals to the Supreme Court are possible on substantial legal questions.
What if payment isn’t made?
SEBI has powerful collection mechanisms:
- Recovery proceedings treating penalties as tax arrears
- Asset attachment and forced sales
- Accumulating interest
- Potential market debarment for continued non-compliance
Non-payment creates far worse consequences than the original penalty.
Does this affect other 2014-2015 traders?
Significantly. With 14,720 entities identified, the Nishaa Anand case represents one of thousands of enforcement actions. Other entities should:
- Check SEBI’s website for unserved notices
- Respond immediately if notices were issued
- Update contact information
- Engage legal counsel
- Consider settlement if available
What does this mean for current traders?
Key takeaways:
- Understand regulations before trading
- Avoid patterns suggesting coordination
- Document all trading rationale
- Diversify counterparties in illiquid markets
- Engage immediately with any SEBI communication
- Ensure prices reflect genuine market conditions
Why only the minimum penalty?
Factors supporting the ₹5 lakh minimum:
- Single contract involved
- Limited scale (1.57% of volume)
- No quantifiable gains or investor losses
- No repetitive violations
- First-time violator
The penalty balanced deterrence with proportionality.
Conclusion
The SEBI order against Nishaa Anand demonstrates unwavering regulatory commitment to market integrity regardless of violation scale. A single reversal trade creating 1.57% of one contract’s volume resulted in ₹5,00,000 in penalties after four years of proceedings. Key principles established are as under:
- No minimum violation threshold exists– all manipulation attracts enforcement
- Non-engagement doesn’t prevent action – SEBI proceeds ex-parte with proper notice
- Circumstantial evidence suffices – trading patterns prove manipulation without direct coordination proof
- Intent is irrelevant – strict liability applies to all violations
- Market integrity harm alone justifies penalties– quantifiable losses aren’t required
For the 14,720 entities involved in the 2014-2015 manipulation, this case signals SEBI’s determination to pursue comprehensive enforcement. For current traders, the message is clear: every trade must serve legitimate purposes with independent decision-making and genuine market pricing.
SEBI’s systematic approach to this investigation, pursuing cases over a decade later with minimum penalties of ₹5 lakh, establishes that market manipulation of any scale carries serious consequences. Compliance isn’t optional, and proper engagement with regulatory processes is essential when issues arise.
The integrity of India’s securities markets depends on every participant choosing legitimate trading over manipulative patterns. Through cases like Nishaa Anand’s, SEBI reinforces that choice with tangible consequences.
This analysis is for educational purposes and does not constitute legal advice. Individuals facing SEBI proceedings should consult qualified securities law attorneys.