sebi:15324
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Facts / Headnote
Suspension of certificate of registration of Galaxy Broking Ltd for a period of three months
Provisions invoked
- s. 19
Regulations
- Reg. 7
- Reg. 5(1)
- Reg. 13(4)
- Reg. 13
- Reg. 4(a)
- Reg. 4(2)
Parties
- Galaxy Broking Ltd
Holding
Galaxy Broking Ltd was held guilty of aiding manipulation in the scrip of Enrich Industries Ltd through synchronized trades, price-influencing orders and misuse of client codes, and its certificate of registration was suspended for three months.
Full text
1. Enrich Industries Ltd. (hereinafter referred to as EIL) was incorporated as Jolly Fiscal Ltd. on 24.07.1992. Its name changed to Enrich Finance Ltd. on 02.09.1994 and subsequently on 23.04.1998 the name of the company was changed to EIL. The shares of the company are listed at the Stock Exchange, Mumbai (hereinafter to be referred to as BSE) and at Ahmedabad Stock Exchange. It had come to the notice of Securities and Exchange Board of India( hereinafter referred to as SEBI) that there was a sudden spurt in price and volume of the scrip
Fraudulent and Unfair Trade Practices Relating to Securities Market) Regulations, 2003(hereinafter to be referred as FUTP Regulations,2003). The enquiry officer further found that the broker has violated Clause A(1), (2), (3), (4) and (5) of the Code of Conduct as specified in Schedule II read with Regulation 7 of SEBI Stock Brokers Regulations and SEBI Circular No. SMD/RCG/CIR (BKG)/293/95 dated 14.03.95.
12. The broker was alleged to have executed 124 synchronized trades in the scrip of EIL with the objective to influence the price of the scrip, out of which in case of 100 transactions, the buy and sale orders had been placed by the broker simultaneously at the same time for the same quantity, same price and for the same client i.e. Tushar Jhaveri. For the remaining 24 transactions, which had been placed around the same time although the quantity was same, there was small difference in the price of buy and sale orders. Such trades had been executed with different client codes, with intention to indicate that the purchase and sale orders had been placed for different clients. However, almost 99% of the brokers trades in the scrip during the investigation period had been executed on behalf of the client Tushar Jhaveri indicating that for such transactions there was no change in beneficial ownership of shares and these were fictitious in nature indicating manipulative intent.
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Source: SecMarx — sebi:15324. 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.