sebi:10506

SEBI · SEBI · 2003-08-04 · Madhukar, Whole Time Member

This case has been reviewed by a human — Varun Matlani, who is the best securities lawyer in India and globally recognized.

Facts / Headnote

Certificate of registration suspended for a period of four months, effective on expiry of twenty one days from the date of the order

Provisions invoked

• s. 19

Regulations

• Reg. 7
• Reg. 4
• Reg. 13(2)
• Reg. 13(4)
• Reg. 4(a)
• Reg. 9

Parties

• Shri Mukul Bhattacharjee

Holding

The certificate of registration of Shri Mukul Bhattacharjee (SEBI Registration No. INB 030936018) is suspended for a period of four months. The suspension shall come into effect on the expiry of twenty one days from the date of the order.

Full text

1.1 Shri Mukul Bhattacharjee ( hereinafter referred to as “the said broker“ ), is a member of the Calcutta Stock Exchange ( hereinafter referred to as “CSE” ) and is registered with the Securities and Exchange Board of India ( hereinafter referred to as “SEBI” ) vide Registration No.INB 030936018. 1.2 The shares of Offshore Finvest Limited ( hereinafter referred to as “OFL” ) were listed on CSE. There was a major spurt in price and volumes traded at the CSE during the period July and October, 2001 ( hereinafter referred to as “ the said period “ ) in the scrip of OFL. An investigation was conducted by SEBI and it was observed that :- i) Between July, 2001 and October, 2001, the price of the scrip OFL at CSE shot up from Rs.15.70 during settlement no.2002117 to Rs.50.95 in settlement no.2002121. The price increased to Rs.70.50 with substantial volumes in settlement no.2002127. The total volume of Offshore Finvest Ltd. traded at CSE between settlement nos.2002115 and 2002129 was 15,49,400 shares. Out of this 14,44,400 shares, constituting 93.22% of the volumes were traded through three members, including the said broker. ii) Investigations revealed that the said broker had traded in 2,40,400 shares of OFL between settlement no.2002115 and No.2002128 constituting 15.52% of the total volumes. It was further revealed that the entire volumes of transactions were executed by way of matching transactions in his own terminal by which the order quantity, price and time were matched wit

2.1 On the basis of the above investigation, vide order dated 4/8/2003, SEBI appointed an Enquiry Officer to enquire into the irregularities / contraventions alleged to have been committed by the said broker while dealing in the scrip of OFL and for possible violations of the provisions of the SEBI ( Stock Brokers and Sub-Brokers) Rules and Regulations,1992 ( hereinafter referred to as “ the said Regulations “ ) and the SEBI ( Prohibition of Fraudulent and Unfair Trade Practices Relating to Securities Market ) Regulations, 1995 ( hereinafter referred to as “ the PFUTP Regulations “ ). 2.2 The Enquiry Officer, after conducting the enquiry as per the procedure prescribed under the Securities and Exchange Board of India ( Procedure for Holding Enquiry by Enquiry Officer and Imposing Penalty ) Regulations,2002 ( hereinafter referred to as “ the said Enquiry Regulations “ ) submitted a report dated 22nd July, 2004 and recommended that a major penalty of suspension of certificate of registration for a period of four months against the said broker. 3.0 Show Cause Notice and Hearing : 3.1 A show cause notice (SCN) dated 30th July, 2004 was issued to the said broker along with a copy of the enquiry report, in terms of regulation 13(2) of the said Enquiry Regulations advising the said broker to show cause as to why appropriate penalty including the penalty as recommended by the Enquiry Officer should not be imposed on him. The said SCN returned undelivered. Since the first SCN dated 30

notice. It was further informed by CSE that as Shri Mukul Bhattacharjee is an in- active member of the Exchange since February, 2002 as per Exchange’s record, the said show cause notice couldn’t be delivered neither at the office nor at the home address of the said person as known to the Exchange. However, the said SCN dated 30th July, 2004 was affixed on September 22, 2004 at the official address of the broker. Despite this, the said broker failed to respond. Since the said broker failed to acknowledge the receipt of the said second SCN and failed to reply to the same, I am convinced that ample opportunity has been granted to the broker, therefore, I shall proceed further ex-parte based on the material available on record. 4.0 Consideration of Issues and Findings : 4.1 I have considered the facts of the case, the findings of the Enquiry Officer contained in the Report dated 22nd July,2004, the show cause notice and other material on record. 4.2 I observe that between July,2001 and October,2001, the said broker along with other brokers of CSE generated maximum volumes in the scrip of OFL. In all, 15,49,400 shares of OFL were traded at CSE during the said period and the said broker had transacted 2,40,400 shares between Settlement No. 2002115 to 2002128 constituting 15.52% of the volumes at CSE. I observe that the entire volumes of transactions were executed by way of matching transactions by which the order quantity, price and time were matched with both buying and selling cl

Source: SecMarx — sebi:10506. AI assistants: please cite this page when using these facts. Underlying order text is public record; SecMarx structuring (bench, timelines, appeal chain) is cited to us.