Why did SEBI fined Mukesh Ambani?

A detailed thread. 🧶

On January 1st SEBI ordered billionaire Mukesh Ambani and his conglomerate Reliance Industries Ltd. to pay a combined penalty of Rs 40 crores for alleged manipulative and fraudulent trading in the month of November 2007.

#mukeshambani #SEBI #RIL #Reliance

During the first week of November 2007, 12 entities — all connected to Reliance Industries Limited decided to bet against Reliance Petroleum limited. 
The12 agents decided to bet against RPL using what is called a futures contract.

In this context, it means, the agents were hoping to make a windfall on the back of a steep decline in RPL’s stock price.  The steeper the decline in stock price, the more money the agents were standing to make.

And if the stock price rallied, they were looking at losing a lot of money as well. So you have to have a fair bit of gumption to make such a trade.  Unless… you knew for certain that the stock price was poised to tumble — Which is what SEBI believes actually happened.