sebi:EAD-2/AO/14/2012
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Facts / Headnote
Penalty imposed on Noticee for violation of Regulations 4(2)(a) & (n) of PFUTP Regulations
Provisions invoked
- s. 15
- s. 15J
- s. 15H
Regulations
- Reg. 4
- Reg. 4(2)(a)
Parties
- Shri Amber Dalal
- Shri Amit Sehgal
- Shri Ramniklal Patel
- Shri Prasad Tandel
- Shri Girdharbhai Vagadiya
- Shri Kalpesh Babariya
- Shri Mahendra Brahmbhatt
Holding
The Noticee was held liable for violating Regulations 4(2)(a) & (n) of the PFUTP Regulations by engaging in circular trading and creating artificial volume in the scrip of G-Tech through coordinated off-market and market transactions with a group of connected entities, and a monetary penalty of Rs. 2,00,000 was imposed under Section 15HA of the SEBI Act.
Full text
Page 2 of 18 2. The investigation revealed that a group of entities connected to each other one way or the other, namely, Shri Amber Dalal, Shri Amit Sehgal, Shri Ramniklal Patel, Shri Prasad Tandel, Shri Girdharbhai Vagadiya, Shri Kalpesh Babariya and Shri Mahendra Brahmbhatt (hereinafter referred to as “the Noticee”)traded through a set of brokers namely DPS Shares & Securities (P) Ltd. (DPS), Action Financial Services (India) Ltd. (AFSL), Galaxy Broking Ltd. (Galaxy), Vijay Bhagwandas & Co. (VBD) and Pilot Credit Capital Ltd. (Pilot) and contributed to extent of 20.77%, 19.37%, 17.15%, 14.06% and 5.43% respectively of the gross market purchase in the scrip. This group of clients accounted for 72.87% of the total valid buy orders in the system for 44, 37,000 shares during the Investigation period. Further, they accounted for 73.82% and 2.52% of the market volume in purchase and sales. The Noticee along with the other entities in the group in collaboration with VBD entered into transactions where one leg of the transaction was in the market and the other in off-market which ultimately led to transactions in the shares of G-Tech and thus the Noticee allegedly created artificial volume.
Page 3 of 18 Appointment of Adjudicating Officer 4. SEBI vide office note dated May 04, 2009 ordered adjudication and appointed Smt Ruchi Chojer as the Adjudicating Officer (AO) to inquire into and adjudge under Section 15 HA and 15 HB of the Act for the alleged violation of the Noticee as mentioned above. Thereafter, SEBI vide order dated January 04, 2012 appointed the undersigned as the AO in the instant matter.
Page 4 of 18 Adjudicating Rules. However, the Noticee did not submit any reply to the SCN. 8. The undersigned granted an opportunity of personal hearing to the Noticee on February 28, 2012 vide hearing notice dated February 07, 2012. The hearing Notice was collected personally by the Noticee from SEBI, Western Regional Office and therefore was duly served.
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Source: SecMarx — sebi:EAD-2/AO/14/2012. 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.