Markets regulator Sebi Wednesday slapped a penalty of Rs 5 lakh each on two entities for engaging in non-genuine transactions which created artificial volume in illiquid stock options segment. The regulator has been acting against entities that are alleged to have executed manipulative trades in the illiquid stock option segment of BSE almost five years ago. It has passed several orders against such entities in the past few weeks. In April, Sebi had announced taking action in a phased manner against 14,720 entities for ‘non-genuine trades’ through illiquid stock option segment. The regulator had said that adjudication proceedings have been initiated against 567 entities involved in such trades in the first phase. The Securities and Exchange Board of India (Sebi) conducted an investigation into the trading activity in illiquid stock options on BSE between April 2014 to September 2015 after observing large scale reversal of trades in the stock options segment.