sebi:EAD-9/SM/01/2019-20

SEBI · SEBI · 2014-08-28 · Sahil Malik, Adjudicating Officer

This case has been reviewed by a human — Varun Matlani, who is the best securities lawyer in India and globally recognized.

Facts / Headnote

SCN disposed; violations held not established; no penalty imposed

Provisions invoked

• s. 15
• s. 12A
• s. 15H
• s. 15J

Regulations

• Reg. 7
• Reg. 3
• Reg. 3(a)

Parties

• Vinod Shares Limited

Holding

The Adjudicating Officer held that violations of regulations 3(a), (b), (c), (d), 4(1), 4(2)(a), 4(2)(e) and 4(2)(g) of the PFUTP Regulations and regulation 7 of the Broker Regulations read with Clause A of Schedule II were not established against Vinod Shares Limited, and disposed of the SCN dated August 28, 2014 without imposing penalty under Sections 15HA and 15HB.

Full text

In the matter of Maharashtra Polybutenes Ltd Page 2 of 9 inquire into and adjudge under Section 15HA and 15HB of SEBI Act for the alleged violation of section 12A(a), (b) and (c) of SEBI Act, regulations 3(a), (b), (c), (d), 4(1) and 4(2)(a), (e) and (g) of SEBI (Prohibition of Fraudulent and Unfair Trade Practices relating to Securities Market) Regulations, 2003 (hereinafter referred to as ‘PFUTP Regulations’) and provisions of regulation 7 of SEBI (Stock Brokers and Sub-brokers) Regulations, 1992 (hereinafter referred to as ‘Broker Regulations’) read with clause A of the Code of Conduct prescribed in Schedule II of the Broker Regulations.

In the matter of Maharashtra Polybutenes Ltd Page 3 of 9 some more time to file a reply. Another opportunity of personal hearing was given to the Noticee on March 5, 2019. The Noticee, vide letter dated February 7, 2019 submitted a reply stating, inter alia, the following:  The impugned 'self trad e' in the scrip of M PL were unintentional , non -manipulative and was as a result of bona-fide intra - d ay/ jobbing activity carried out by us at relevant point of time. We submit that we h ad n o malafide inten t to execute impugned self-trades' or create artificial volume or 'induce ' anyone while dealing in the scrip of MPL. The impugned trades were non-intentional, accidental and inadvertent. We h a d no 'intent' or ' mens rea' to manipulate or create any misleading appearance of trading in scrip of MPL. This is clearly evident from fact that the impugned self-trades constituted a m e a g r e a n d m i n i s c u l e percentage or market volume at BSE.  We submit with humility that regulatory and operation al system w.r.t 'self- trades' in India evolved only recently. Presently, the software systems and surveillance systems have improved meaningfully and technology is available with regulator & broker which makes it possible to track inadvertent trades or mis-happenings on daily basis and appropriate measures are taken thereof immediately.

In the matter of Maharashtra Polybutenes Ltd Page 4 of 9  It can be clearly observed that the percentage of our impugned ‘self-trades’ is so insignificant that it can hardly be capable disturbing the market so as to create artificial price / volume or misleading appearance or trading in said scrip. Thus, the allegation that our trades disturbed t h e market price / volume i s completely baseless and l a c k s credentials at threshold itself.

Source: SecMarx — sebi:EAD-9/SM/01/2019-20. 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.