sebi:AO/SBM/EAD-3/144-146/2018
This case has been reviewed by a human — Varun Matlani, who is the best securities lawyer in India and globally recognized.
Facts / Headnote
Violations found against Noticee 1, Noticee 2 and Noticee 3; penalty determination not stated in the excerpt
Provisions invoked
- s. 15A
- s. 15
- s. 19
- s. 15H
- s. 15J
- s. 12
- s. 4A
Regulations
- Reg. 7
- Reg. 7(1)
- Reg. 13
- Reg. 12(1)
- Reg. 13(1)
- Reg. 13(3)
- Reg. 13(4)
- Reg. 13(5)
- Reg. 12
- Reg. 35
Parties
- Unicon (Noticee 1)
- Sunil Kumar Agarwal (Noticee 2)
- Pardeep Kumar Agarwal (Noticee 3)
Holding
The order holds that Noticee 1 (Unicon) violated Clauses A(2) and A(5) of the Code of Conduct for Stock Brokers under Schedule II read with Regulation 7 of the Stock Broker Regulations; Noticee 2 (Sunil Kumar Agarwal) violated Regulation 7(1) of SAST Regulations, Regulations 13(1), 13(3), 13(4) read with 13(5) of PIT Regulations and Clause 4.2 of the Model Code of Conduct under Schedule I read with Regulation 12(1) of PIT Regulations; and Noticee 3 (Pardeep Kumar Agarwal) violated Regulation 13(1), 13(3) and 13(4) read with 13(5) of PIT Regulations.
Full text
Page 2 of 29 Kumar Agarwal (hereinafter referred to as “Noticee 2”/“SKA”) and Mr. Pardeep Kumar Agarwal (hereinafter referred to as “Noticee 3”/ “PKA”) have allegedly violated the relevant provisions of SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 1997 (hereinafter referred to as 'SAST Regulations, 1997') and also SEBI (Prohibition of Insider Trading) Regulations, 1992 (hereinafter referred to as 'PIT Regulations, 1992'). In view of the above, adjudication proceedings were initiated against Noticee 1, Noticee 2 and Noticee 3 (hereinafter also collectively referred to as “Noticees”) under the following provisions of law Entity Penal Provisions Noticee 1/Unicon
Page 3 of 29 against the Noticees for their alleged failure to comply with the relevant provisions of law, as mentioned above. SHOW CAUSE NOTICE, REPLY AND PERSONAL HEARING:
Page 4 of 29 3 and thereafter, allowed its client i.e. Noticee 3 to trade further. It is also observed from the reply submitted by Noticee no 1 that the said amount of Rs 52 lakhs claimed to have been received by it from Noticee 3 was not posted by Noticee 1 in the client ledger/ledger account of Noticee 3. It is therefore alleged that Noticee 1 has failed to post the entries in the client ledger of Noticee 3 w.r.t Rs 52 lakhs received by it from Noticee 3. d) It is observed from the ledger account of Noticee 3, submitted by Noticee 1, that large debit balance (more than one crore rupees) was allowed by Noticee 1 since April 2011. It is alleged that despite the presence of the huge debit balance in the account of Noticee 3, Noticee 1 had allowed its client i.e Noticee 3 to trade in his account. It is further observed that Noticee 1 sold the shares of the Company which were lying in the account of Noticee 3 to cover up the debit balance. It was alleged that Noticee 1 sold the shares of the Company from the account of Noticee 3 without taking the specific approval/permission from Noticee 3. e) In light of the above, it is alleged that the Noticee 1, by allowing Noticee 3 to trade in his trading account/demat account despite having large debit balance, not posting the entries in the client ledger, trading by Noticee 1 without obtaining the permission from its client have failed to exercise due skill, care and diligence which is expected from a Stock Broker registered with SEBI u
You have read the preview. Create a free account to read the full order, track this party, and analyse it in Ontology.
Free accounts include 10 searches/day with full order access.
Source: SecMarx — sebi:AO/SBM/EAD-3/144-146/2018. 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.