sebi:11427

SEBI · SEBI · 2000-08-25 · A K Batra, 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

Warning issued to the broker; the recommended two-month suspension of certificate of registration was held excessive.

Provisions invoked

• s. 19

Regulations

• Reg. 7
• Reg. 13(4)
• Reg. 13
• Reg. 4(b)

Parties

• Shri Mahesh J Doshi (M J Doshi), member, BSE

Holding

The broker was found to have failed to exercise due skill and care by not noticing the circular trading pattern of his clients in MHL shares, thereby enabling them to create a false and misleading appearance of trading in violation of Regulation 4(b) of the PFUTP Regulations. However, a penalty of warning was imposed instead of the recommended two-month suspension, as suspension was held to be excessive under the circumstances.

Full text

1. Shri M J Doshi (hereinafter referred to as ‘the said broker’) is registered with the Securities and Exchange Board of India (hereinafter referred to as ‘SEBI’) as stock broker and is a member of The Stock Exchange, Mumbai (hereinafter referred to as ‘BSE’).

vii. Trading in the scrip was very infrequent, as is evident from the following table: Month & Year No. of Trades No. of days traded Avg. trades per day Total Qnty. Traded Avg. Qnty. Per day Aug 99 115 22 5 31,000 1,409 Sept 99 59 19 3 7,700 405 Oct 99 11 8 1 2,300 288 Nov 99 6 5 1 700 140 Dec 99 34 11 3 3,600 327 Jan 00 4 4 1 400 100 Feb 00 4 6 1 700 117 Mar 00 26 13 3 4700 362 Apr 00 1 1 1 100 100 May 00 31 8 4 22,400 2,800 June 00 11 6 2 1,100 183 July 00 NIL NIL NIL NIL NIL Aug 00* Not. Available. 5 Not Available. 85,400 17,080

Sept 00* -do-. 20 -do- 4,64,200 23,210 Oct 00* ‘’. 19 ‘’. 3,47,400 18,285 Nov 00* ‘’ 20 ‘’. 4,76,500 23,825 Dec 00* N. A. 20 N. A. 5,08,700 25,435 * The sudden spurt in Volume has been shown in Bold and Italics. viii. As is observed from the above table, w.e.f August 2000, the volumes started going up and were in the range of 20,000 to 25,000 shares per day till December

Source: SecMarx — sebi:11427. 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.