sebi:EAD-6/PM-AB/025/2019-20

SEBI · SEBI · 2018-03-27 · Prasanta Mahapatra, Adjudicating Officer

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Facts / Headnote

Penalty of Rs. 8,00,000 imposed on the Noticee for violation of PFUTP Regulations

Provisions invoked

• s. 15
• s. 15H
• s. 15J

Regulations

• Reg. 3
• Reg. 3(a)

Holding

The Noticee violated Regulations 3(a),(b),(c)&(d) and 4(1), 4(2)(a)&(e) of the PFUTP Regulations by manipulating the price of Malabar scrip, and monetary penalty of Rs. 8,00,000 under Section 15HA of the SEBI Act was imposed.

Full text

Page 2 of 11 SHOW CAUSE NOTICE, REPLY AND PERSONAL HEARING 4. A Show Cause Notice dated March 27, 2018 (hereinafter be referred to as the “SCN”) was issued to the Noticee under Rule 4 of the AO Rules to show cause as to why an inquiry should not be initiated and penalty be not imposed under Section 15HA of the SEBI Act for the allegations as detailed in the said SCN. The SCN alleged that during the investigation period, the price of the scrip of Malabar opened at Rs. 5.15 and closed at Rs. 13.5 with a high of Rs. 351.9 and a low of Rs. 5.15. A total of 33,01,711 shares were traded during the investigation period with the average daily traded volume of 8,296 shares. The price movement during the investigation period was examined in various patches. As per the trade data during the period December 26, 2011 to May 29, 2014 the scrip price of Malabar opened at Rs.5.15 and closed at Rs.126.5 i.e. contributing to net positive LTP of Rs.121.35. The summary of trading of the Noticee was as follows: Table 1: Summary of trading done by the Noticee

Page 3 of 11 Date Buy Order time Sell order Time Buy Order Quantity Sell Order Quantity Buy Order Price Sell Order Price Traded Quantity LTP Impact (in Rs.) Total market volume during the day Total no. of trades during the day No. of shares held before trade Balance No. of shares after trade 30/01/2013 09:00:00 13:56:41 100 5 21 21 5 0.4 5 1 2850 2845 31/01/2013 09:00:01 15:02:43 100 5 21.4 21.4 5 0.4 5 1 2845 2840 04/02/2013 09:00:00 15:15:54 500 5 21.8 21.8 5 0.4 355 3 2840 2835 05/02/2013 09:00:00 11:20:43 500 5 22.2 22.2 5 0.4 5 1 2835 2830 07/02/2013 09:00:01 12:56:26 200 5 23.05 23.05 5 0.45 5 1 2830 2825 08/02/2013 09:00:00 14:33:26 495 8 23.5 23.5 8 0.45 8 1 2825 2817 11/02/2013 09:00:01 14:25:32 200 5 23.95 23.95 5 0.45 5 1 2817 2812 12/02/2013 09:00:01 10:41:24 1000 7 24.4 24.4 7 0.45 7 1 2812 2805 20/02/2013 09:00:00 13:12:27 1000 5 27.3 27.3 5 0.5 5 1 2705 2700 09/07/2013 10:30:00 10:42:14 900 5 34.3 34.3 5 0.65 5 1 2100 2095 08/08/2013 14:30:00 14:57:38 900 10 34.95 34.95 10 0.65 10 1 2095 2085 19/08/2013 14:33:30 15:11:26 1000 10 36.3 36.3 10 0.7 10 1 2085 2075 10/10/2013 14:30:01 14:35:06 1000 5 42.3 42.3 5 0.8 5 1 2075 2070 11/10/2013 10:30:01 10:58:26 198 5 43.1 43.1 5 0.8 5 1 2070 2065 28/11/2013 13:30:01 13:48:08 1000 10 55.35 55.35 10 1.05 10 1 2065 2055 04/12/2013 14:30:01 15:10:25 172 10 56.45 56.45 10 1.1 10 1 2055 2045 23/01/2014 09:00:01 10:25:16 400 5 69.85 69.85 5 1.35 5 1 2040 2035 24/01/2014 09:00:01 09:57:49 10000 10 71.2 71.2 10 1.35 10010 9 203

Page 4 of 11 6. From the trading of the Noticee, it was observed that the sell orders were placed for shares in the range of 5-20 shares when the respective buy order quantity was in the range of 100-10000 shares were already available in the system and on most days the trades of the Noticee were the only trades.

Source: SecMarx — sebi:EAD-6/PM-AB/025/2019-20. 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.