sebi:EAD-2/DSR/RG/PU/340/2015
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Facts / Headnote
Penalty imposed on the Noticee
Provisions invoked
- s. 15
- s. 12A
- s. 12
- s. 15J
Regulations
- Reg. 3
- Reg. 15
Parties
- Shri Rajesh Pradhan
Holding
The Noticee, a sub-broker and employee of VEL, was found to have violated Regulations 3(a), (b), (c), (d) and 4(1) of the PFUTP Regulations read with Section 12A(a), (b) and (c) of the SEBI Act, and Clauses A(1), (2), D(4) and D(5) of the Code of Conduct under Schedule II read with Regulation 15 of the Broker Regulations, by executing sham cross deals for company-related entities. A total penalty of Rs. 7,00,000 was imposed (Rs. 5,00,000 under Section 15HA and Rs. 2,00,000 under Section 15HB of the SEBI Act).
Full text
Page 2 of 20 2. The investigation, inter alia, revealed that VEL had made certain major corporate announcements and during and after the said announcements it was observed that five brokers, including Techno Shares and Stock Brokers Ltd. (herein after referred to as ‘Techno’), a member broker at the BSE and NSE, through its sub-broker viz. Shri Rajesh Pradhan (herein after referred to as the ‘Noticee’) had traded in the scrip of VEL on BSE and NSE. It was observed that Techno was having the highest concentration of trading in the scrip of VEL and had mainly traded through the Noticee on behalf of the company (VEL) related entities namely, Valecha Investment Pvt. Ltd (VIPL), Reena Valecha, Padma Valecha and other corporate entities namely Occasion Impex Pvt. Ltd (Occasion), Worth Buying Trading Pvt. Ltd (Worth), Admire Consultants Pvt. Ltd. (Admire), and Wind Mill Exports Pvt. Ltd (Windmill). Techno was observed to have 9.31% and 9.24% concentration in the buy and sell side, respectively, at BSE and 6.13% (buy) and 2.89% (sell) concentration at NSE.
Page 3 of 20 and 4 (1) of SEBI (Prohibition of Fraudulent and Unfair Trade Practices) Regulations, 2003 (hereinafter referred to as ‘PFUTP Regulations’) read with Section 12 A (a), (b) and (c) of the SEBI Act, 1992 (SEBI Act) and Clauses A (1), (2), D (4) and D (5) of the Code of Conduct specified under Schedule II of SEBI (Stock Brokers & Sub-Brokers) Regulations,1992 (hereinafter referred to as the ‘Broker Regulations’) read with Regulation 15 of the Broker Regulations.
Page 4 of 20 already been provided along with the SCN and therefore, no further documents can be provided in the matter. The Noticee vide his letter dated July 30, 2011, again requested for an adjournment of the scheduled hearing and sought additional four weeks time to file his reply in the matter. The said request was not acceded to and vide notice dated August 03, 2011, another opportunity of personal hearing was granted to the Noticee on August 24, 2011, which was returned undelivered. In the meanwhile, the Noticee vide his letter dated August 30, 2011, again requested for additional time of four weeks to file his written submissions along with an opportunity of hearing post the submission of his reply. Vide letter dated September 28, 2011, the Noticee filed his reply to the SCN. Thereafter, another opportunity of personal hearing was granted to the Noticee on October 31, 2011. Since, neither the Noticee appeared on the scheduled date of hearing nor communicated about his absence, another opportunity of personal hearing was granted to the Noticee on February 07,
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Source: SecMarx — sebi:EAD-2/DSR/RG/PU/340/2015. 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.