sebi:BM/AO-15/2010
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Facts / Headnote
Penalty imposed on the Noticee for violation of PFUTP Regulations and Code of Conduct for Stock Brokers
Provisions invoked
- s. 15
- s. 15H
- s. 15J
Regulations
- Reg. 7
- Reg. 3
Parties
- Ahilya Commercial Pvt. Ltd. (ACPL)
Holding
The Noticee (Ahilya Commercial Pvt. Ltd.) violated regulations 3, 4(1), 4(2)(a), (b), (e), (g), (n), (o) of PFUTP Regulations and clauses A(1), (2), (3), (4) and B(4)(a) of the Code of Conduct for Stock Brokers by executing cross and synchronized deals that created artificial volume and manipulated the price of the scrip of SCL. A total penalty of Rs.4,00,000/- was imposed (Rs.3,00,000 under section 15HA and Rs.1,00,000 under section 15HB of the SEBI Act).
Full text
Page 2 of 18 Rs.17.6 to Rs.84/- during the period February 9, 2005 to March 31, 2005 2. On analysis of the trading data obtained from CSE it was observed that the transactions of six brokers viz: Mukesh Dokania & Co., Rajendra Prasad Shah, Ahilya Commercial Pvt. Ltd. (hereinafter after refereed to as “Noticee/ACPL”), Bubna Stock Broking Services Ltd., N.M. Lohia & Co. and Shyam Lal Sultania, constituted 62% of the volume in the scrip of SCL. The role of the brokers and the entities who had traded in the scrip of SCL was scrutinized. It was alleged that through collusion with the brokers, shares of SCL were transacted in such a manner that led to creation of artificial volumes in the scrip and was designed to create a false market leading to significant price movement in the scrip which lacked presence of any sort of fundamentals.
Page 3 of 18 APPOINTMENT OF ADJUDICATING OFFICER 4. Shri V.S. Sundaresan was appointed as Adjudicating Officer vide order dated March 27, 2008 under section 15 I of Securities and Exchange Board of India Act, 1992 (hereinafter referred to as “SEBI Act”) read with rule 3 of SEBI (Procedure for Holding Inquiry and Imposing Penalties by Adjudicating Officer) Rules, 1995 (hereinafter referred to as ‘Rules’) to inquire into and adjudge the alleged violations of provisions of PFUTP and Brokers Regulations committed by the Noticee.
Page 4 of 18 8. The Noticee vide letter dated September 16, 2008 replied to the SCN stating, inter alia, the following :
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Source: SecMarx — sebi:BM/AO-15/2010. 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.