sebi:EAD-7/BJD/VS/2018-19/1744

SEBI · SEBI · B J Dilip, Adjudicating Officer

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Facts / Headnote

Noticee held liable and penalty of Rs 5,00,000 imposed under Section 15HA of SEBI Act, 1992

Provisions invoked

• s. 15
• s. 19
• s. 15H
• s. 15I
• s. 15J
• s. 15I(1)

Regulations

• Reg. 3
• Reg. 4
• Reg. 2(1)(c)
• Reg. 3(a)

Parties

• Rajesh Bhagchandji Kochar

Holding

The Noticee violated Regulations 3(a), 3(b), 3(c), 3(d), 4(1) and 4(2)(a) of SEBI (PFUTP) Regulations, 2003 by executing non-genuine reversal trades in illiquid stock options creating artificial volume. A monetary penalty of Rs 5,00,000 was imposed under Section 15HA of the SEBI Act, 1992.

Full text

Adjudication Order in respect of Rajesh Bhagchandji Kochar Page 2 of 20 points narrate the dealings of the Noticee during the investigation period and the allegations against it for execution of non-genuine trades.

Adjudication Order in respect of Rajesh Bhagchandji Kochar Page 3 of 20 the aforementioned contracts were due to non-genuine trades executed by the Noticee. c) A substantial 44% to 100% of volume generated by the Noticee in each of the above contracts was artificial volume, and further artificial volume generated by him also contributed to significant contribution of the total volume from the market in said contracts. d) Non genuine trades executed by Noticee in above contracts had significant differential in buy rates and sell rates considering that the trades were reversed on same day.

Adjudication Order in respect of Rajesh Bhagchandji Kochar Page 4 of 20 SHOW CAUSE NOTICE, REPLY AND HEARING 9. A Show Cause Notice (hereinafter referred to as “SCN”) bearing ref. no. SEBI/HO/EAD-7/BJD/NJMR/23389/2018 dated August 23, 2018 was issued upon the Noticee under Rule 4 of SEBI Adjudication Rules to show cause as to why an inquiry be not held against him in terms of Rule 4 of the Adjudication Rules and penalty be not imposed under Section 15HA of SEBI Act, 1992 for the violations alleged to have been committed by him. The same was delivered on August 27, 2018 and the proof of service is on record. Further, Advocate Shaista Pathan of M/s Y & A legal, Advocates vide their letter dated November 2,2018 referred to the aforesaid SCN and stated that the reply would be submitted shortly. However, it was noted that, no letter of authorisation was submitted along with the said letter. Further, no reply was submitted by the Noticee even after more than 3 months from the date of delivery of the SCN.

Source: SecMarx — sebi:EAD-7/BJD/VS/2018-19/1744. 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.