sebi:DRK/AO-338/4/2013
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Facts / Headnote
Penalty imposed on Noticee for violation of regulation 11(1) of Brokers Regulations and sections 11C(2) and 11C(3) of SEBI Act
Provisions invoked
- s. 15A
- s. 15
- s. 15H
- s. 15J
- s. 11C
- s. 12
Regulations
- Reg. 11
- Reg. 11(1)
- Reg. 9
Parties
- Sunita Gupta
Holding
The Noticee was found to have violated regulation 11(1) of the Brokers Regulations by acting as an unregistered sub-broker, and sections 11C(2) and 11C(3) of the SEBI Act by failing to fully comply with summonses issued by the Investigating Authority. A consolidated penalty of Rs. 5,00,000 was imposed on the Noticee.
Full text
Page 2 of 11 SHOW CAUSE NOTICE, REPLY AND PERSONAL HEARING 4. Show Cause Notice dated September 30, 2011 (hereinafter referred to as “SCN”) was issued to the Noticee under rule 4 of the Rules to show cause as to why an inquiry should not be initiated and penalty be not imposed under section 15A(a) and 15HB of the SEBI Act for failure to comply with the provisions of regulation 11(1) of the Brokers Regulations and sections 11C (2) and 11C (3) of the SEBI Act. It was alleged in the SCN that the Noticee was not registered as a sub- broker with SEBI, however, it was trading through stock broker Parasram Holdings Pvt. Ltd.(hereinafter referred to as 'PHPL') in the scrip of SIL. It was further alleged that Noticee was required to furnish the details/documents to SEBI as mentioned in SEBI’s various letters and summonses. However, Noticee submitted the information partially after repeated letters and summonses and did not appear before the Investigating Authority (hereinafter referred to as 'IA') . The abovementioned SCN was duly served on the Noticee through SPAD.
Page 3 of 11 on the Noticee to appear for personal hearing on May 29, 2011 at SEBI Bhavan, Mumbai. Noticee vide its reply dated May 18, 2012 reiterated its contentions and stated that she has already filed consent application. However, it was found from the records that its consent application was returned due to certain discrepancies and was advised to file a revised application. Therefore, vide email dated May 28, 2012 it was informed to her by enclosing a copy of the letter dated January 6, 2012 that consent application was returned. Subsequently, final hearing notice dated June 15, 2012 was served on the Noticee to appear for personal hearing on June 29, 2012 at SEBI northern regional office situated at Delhi. However, Noticee has failed to appear for the personal hearing granted even at Delhi. Further, as per the records till date the Noticee has not filed the consent application.
Page 4 of 11 SEBI Act 11C. Investigation (2). Without prejudice to the provisions of sections 235 to 241 of the Companies Act, 1956, it shall be the duty of every manager, managing director, officer and other employee of the company and every intermediary referred to in section 12 or every person associated with the securities market to preserve and to produce to the Investigating Authority or any person authorized by it in this behalf, all the books, registers, other documents and record of, or relating to, the company or, as the case may be, of or relating to, the intermediary or such person, which are in their custody or power. (3). The Investigating Authority may require any intermediary or any person associated with securities market in any manner to furnish such information to, or produce such books, or registers, or other documents, or record before him or any person authorized by it in this behalf as it may consider necessary if the furnishing of such information or the production of such books, or registers, or other documents, or record is relevant or necessary for the purposes of its investigation.
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Source: SecMarx — sebi:DRK/AO-338/4/2013. 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.