New Delhi: The Supreme Court has issued a notice to Indiabulls Securities after market regulator SEBI challenged a Securities Appellate Tribunal (SAT) order.

A three-judge bench headed by Chief Justice S H Kapadia issuing the notice to the brokerage firm on the appeal of SEBI, asked the firm to file its reply.

The Securities and Exchange Board of India had on February 25, 2009, imposed a fine of Rs 15 lakh on Indiabulls Securities after finding that the firm indulged in manipulative and fraudulent practices in the Futures and Options (F&O) during January-March 2007.

Indiabulls Securities, however, had challenged SEBI's order before appellate tribunal SAT. After observing that there was no fraudulent practice, the SAT on October 26, 2010, had set aside SEBI's order.

According to SEBI, it found Indiabulls had executed 23 non-genuine and reverse trades on behalf of 15 clients in 21 futures and two options contracts on 22 different underlying scrips and one bank Nifty futures.

Sebi held Indiabulls guilty of violating Regulations 3 and 4 of the FUTP Regulations.

This was challenged by Indiabulls before SAT, which held, "The trades in this case were only for tax planning and do not manipulate the market and nor are they fictitious or non-genuine. All the appeals are allowed and the impugned orders set aside with no order as to costs."