sebi:ID3/JDIL/AO/DRK/AKS/EAD3/212-09/115-10
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Facts / Headnote
Penalty imposed on the noticee for fraudulent and unfair trade practices
Provisions invoked
- s. 15
- s. 15H
- s. 15J
- s. 44A
Regulations
- Reg. 3
- Reg. 4(1)
- Reg. 31
Parties
- Samradha Finstock Pvt. Ltd.
Holding
The Adjudicating Officer held that Samradha Finstock Pvt. Ltd. violated Regulations 4(1) and 4(2)(a), (b) and (e) of the PFUTP Regulations by executing synchronized trades in the scrip of JDIL on BSE, and imposed a penalty of Rs. 26,00,000 under Section 15HA of the SEBI Act.
Full text
Page - 2 - of 16 3. On the BSE during the period under investigation i.e. from May 10, 2005 to September 02, 2005 the scrip was traded for 83 days out of the 83 trading days. The price of the scrip opened at ` 164.10 on May 10, 2005 touched a high (intra day) of ` 309.50 on September 02, 2005 and closed at ` 293.05. The price of the scrip increased by 88.60% during the investigation period. During the same period, BSE 500 Index increased from 2726.97 points to 3308.4 points, which was an increase of 21.32%. The average daily volume of the scrip during the investigation period was 69,098. The total volume in the scrip during the period under investigation was 57,35,150 shares on gross basis. It was observed that there was a spurt in volume on particular days i.e. on May 10, 24, June 22, July 01, August 09, 10, 30 and September 02, 2005.
Page - 3 - of 16 Ltd., Indiabulls Securities Ltd., Religare Securities Ltd., UTI Securities Ltd., Samurai Securities Pvt. Ltd., mainly dealt for these common/ connected clients. This group accounted for over 25% of the total traded volumes in the scrip. It was observed that these connected entities had entered into trades with each other throughout the period of examination and the majority of their trades appeared to be through synchronized orders. The Investigation Report alleged that the connected entities placed buy and sell orders which had resulted into trades among themselves and were thus instrumental in creating artificial volumes and price rise in the scrip which distorted the market equilibrium. APPOINTMENT OF ADJUDICATING OFFICER
Page - 4 - of 16 the scrip of JDIL, which resulted in creation of artificial volume, manipulation of the price of the scrip and distorting the market equilibrium during the investigation period from May 10, 2005 to September 02, 2005 and were in violation of Regulations 4(1) & 4(2) (a), (b) and (e) of the PFUTP Regulations. The SCN was returned undelivered by the Postal Authorities.
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Source: SecMarx — sebi:ID3/JDIL/AO/DRK/AKS/EAD3/212-09/115-10. 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.