Question:
A representation made in a reckless or careless manner, even if not false, is treated as:
A representation made in a reckless or careless manner, even if not false, is treated as:
Show Hint
Under SEBI rules, making statements about securities without verifying the facts is treated as market fraud, even if the statements are not proven false.
Updated On: Jun 22, 2026
- A permissible opinion
- A technical error
- Fraudulent under SEBI regulations
- An analyst's right
\bigskip
Show Solution
Verified By Collegedunia
The Correct Option is C
Solution and Explanation
Step 1: Reviewing SEBI Market Abuse Regulations:
The SEBI (Prohibition of Fraudulent and Unfair Trade Practices relating to Securities Market) Regulations, 2003, defines “fraud” broadly to prevent market manipulation.
Step 2: Analyzing Reckless Disclosures:
Under SEBI rules, making a statement of fact without reasonable grounds, or disclosing information in a careless or negligent manner that can mislead investors, is treated as fraud. The fact that the statement is not proven false does not excuse the reckless behavior.
Step 3: Determining the Legal Classification:
Because reckless statements can artificially manipulate stock prices or trading volumes, they are legally classified as Fraudulent under SEBI regulations (C).
The SEBI (Prohibition of Fraudulent and Unfair Trade Practices relating to Securities Market) Regulations, 2003, defines “fraud” broadly to prevent market manipulation.
Step 2: Analyzing Reckless Disclosures:
Under SEBI rules, making a statement of fact without reasonable grounds, or disclosing information in a careless or negligent manner that can mislead investors, is treated as fraud. The fact that the statement is not proven false does not excuse the reckless behavior.
Step 3: Determining the Legal Classification:
Because reckless statements can artificially manipulate stock prices or trading volumes, they are legally classified as Fraudulent under SEBI regulations (C).
Was this answer helpful?
0
0
Top CBSE CLASS XII Financial Markets Management Questions
- What can happen if one does not listen attentively in communication?
- How can excess felling of trees affect ecosystems?
- People with ___________________________ personality disorder tend to lack guilt and fail to learn from experience.
- Which feature is not mentioned as an advantage of presentation software?
- How can organisational skills contribute to an entrepreneur's success?
View More Questions
Top CBSE CLASS XII Financial Analysis Questions
- Which financial ratios are used to assess the long-term solvency of a firm?
- Why is Earnings Per Share (EPS) considered important for investors?
- What does the Profit and Loss Account help stakeholders assess?
- Who are responsible for assessing the creditworthiness of companies and financial instruments?
- If the interest rate increases, what happens to the present value of a future amount?
View More Questions
Top CBSE CLASS XII Questions
- 2, b, c are in A.P. and the range of determinant $\begin{vmatrix}1&1&1\\ 2&b&c\\ 4&b^{2}&c^{2}\end{vmatrix}$ is [2, 16]. Then find range of c is
- A boy of mass 50 kg is standing at one end of a, boat of length 9 m and mass 400 kg. He runs to the other, end. The distance through which the centre of mass of the boat boy system moves is
- A capillary tube of radius r is dipped inside a large vessel of water. The mass of water raised above water level is M. If the radius of capillary is doubled, the mass of water inside capillary will be
- A circular disc is rotating about its own axis. An external opposing torque 0.02 Nm is applied on the disc by which it comes rest in 5 seconds. The initial angular momentum of disc is
- A circular disc is rotating about its own axis at uniform angular velocity \(\omega.\) The disc is subjected to uniform angular retardation by which its angular velocity is decreased to \(\frac {\omega}{2}\) during 120 rotations. The number of rotations further made by it before coming to rest is
View More Questions