sebi:IES/ID2/RKK/BK/42682/01
Facts / Headnote
Registration of Dev Stock Broking Services Ltd. (member ASE) suspended for six months with effect from September 30, 2002.
Regulations relied on
- SEBI (Stock Brokers) Regulations, 1992 — 29(3)
- SEBI (Stock Brokers) Regulations, 1992 — 7
Parties
- Dev Stock Broking Services Ltd.
Holding
SEBI suspended the registration of Dev Stock Broking Services Ltd. for six months for dealing in shares of Infoquest Software Ltd. prior to listing in large quantities on behalf of Shri. Deep Trivedi, which led to manipulation of the price of the scrip and violated Regulation 7 of the SEBI (Stock Brokers and Sub-Brokers) Regulations, 1992.
Full text
dealt in the shares of Infoquest Software Ltd. (ISL) on behalf of mainly Shri. Deep Trivedi having the address of 2nd Floor, Apollo Towers, M. G. Road, Indore, who manipulated the price of the shares of ISL. It was further seen that, most of these transactions were done in grey market i.e. before the listing of the scrip on the stock exchanges. It was seen that, the payment for these transactions were made by way of Demand Drafts issued by various banks from Indore. It was seen that DSL was yet to receive approx. Rs. 1 crore for the purchases made by Shri Trivedi. During the course of investigations, statement of Shri. Devendra Shah was recorded. Shri Shah was asked to state the intention of Shri Deep Trivedi in purchasing such large quantity of around 11 Lac shares of ISL shares prior to listing. It was replied that Shri Trivedi was making both purchases and sales in the grey market and was making regular payments. It was also stated that Shri Deep Trivedi has purchased approx. 11 lac shares before listing at the rate of Rs.30/- per share or so. Shri Shah also stated that he did not think of price rigging by Shri Trivedi and he was concerned only about earning brokerage. Investigations brought out that, Dev Stock Broking Services Ltd. had dealt in the shares of ISL prior to listing in large quantities mainly on behalf of Shri. Deep Trivedi, which led to manipulation of price of shares of ISL. Pursuant to investigations, an enquiry officer was appointed to enquire into the al
In view of this, another opportunity for personal hearing was granted to the broker to appear on August 17, 2002, in which Shri. Mitesh D. Shah appeared in person on behalf of Dev Stock Broking Services Ltd. and made oral submissions. During the personal hearing, Shri. Mitesh Shah stated that, they had purchased around 11 Lac shares of ISL prior to listing on behalf of Shri. Deep Trivedi, who had not made payment to the broker till date and as a result they have suffered huge losses. Shri. Mitesh Shah requested to take a lenient view. I have carefully examined the enquiry reports, submissions made from time to time, facts and material on record. I find that Dev Stock Broking Services Ltd., member ASE purchased shares Infoquest Software Ltd. (ISL) prior to listing of the scrip on stock exchanges in large quantities, mainly on behalf of Shri. Deep Trivedi. It is seen that, these large purchases prior to listing in the scrip of ISL have not been disputed by him. I find that, these large purchases led to manipulation of price of scrip of ISL and were in violation of Regulation 7 of SEBI (Stock Brokers and Sub-Brokers) Regulations, 1992. In view of this, I agree with the recommendations of the enquiry officer in this regard. I, therefore, in exercise of the powers conferred in terms of Sub-Section (3) of Section 4 of SEBI Act read with Regulation 29(3) of Securities and Exchange Board of India (Stock Brokers and sub brokers) Regulations, 1992, hereby direct that the registration g
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Source: SecMarx — sebi:IES/ID2/RKK/BK/42682/01. 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.