sebi:GG/AO-02/2010
This case has been reviewed by a human — Varun Matlani, who is the best securities lawyer in India and globally recognized.
Facts / Headnote
STCL held liable for violation of Regulation 4(2)(a) of FUTP Regulations and penalty of Rs. 5 lakhs imposed under Section 15HA
Provisions invoked
- s. 15
- s. 15H
- s. 15J
Regulations
- Reg. 4
- Reg. 4(2)
- Reg. 4(2)(a)
Parties
- STCL
Holding
STCL violated Regulation 4(2)(a) of the FUTP Regulations, 2003 by placing huge buy orders and deleting them to create false appearance of trading in ESKAY K n IT Limited, and is liable for penalty under Section 15HA of the SEBI Act.
Full text
2 14.09 i.e. (by 233%). Investigation also revealed that STCL did not have adequate net worth to support such large orders.
3 5. A table bringing out the changes in volume and price of the scrip before and after the period of investigation was provided in para 5 of the SCN. The price and volume movements before and after the investigation have been brought out in the said table. The same is extracted below for easy reference.
4 6. There was a significant spurt in the trading volume in the scrip during the ten trading days between 24.8.2005 and 12.09.2005. The trading details during the period 24.08.2005 to 12.09.2005 (Annexure II of SCN) show that STCL through its Broker had placed a total quantity of 53954058 shares. Based on Annexure II, it was stated in the SCN that out of the total buy orders placed by STCL, only 3928001 shares got executed and this constituted merely 7.28% of the total valid orders. A large chunk of buy orders totaling to 39067740 shares were deleted by STCL. It was stated that about 72.4% of the total valid orders placed by STCL were deleted by STCL. During the said ten trading days, the number of shares that were deleted after being placed by STCL constituted 83.34% of the total buy orders. It is observed that STCL had placed large quantity of buy orders of a size of above 10 Lakh shares through its Broker aggregating to a total of 37746185 shares and the details of the order placed by STCL during the period between August 30, 2005 to September 6, 2005 were shown in Annexure III of SCN.
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Source: SecMarx — sebi:GG/AO-02/2010. 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.