sebi:IVD/WOL/AO/DRK/ASG/EAD3-68/2009
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Facts / Headnote
Ex-parte penalty of Rs. 2,00,000 imposed on the noticee under Section 15HA of the SEBI Act, 1992
Provisions invoked
- s. 15
- s. 15H
- s. 15J
Regulations
- Reg. 3
- Reg. 4(1)
- Reg. 199
- Reg. 31
Parties
- Laxmanbhai Patel
Holding
The Adjudicating Officer held ex-parte that Shri Laxmanbhai Patel violated Regulations 3, 4(b) of PFUTP Regulations, 1995 read with Regulations 4(1), 4(2)(a), (b) and (g) of PFUTP Regulations, 2003 by executing circular/reversal synchronized/structured non-genuine trades in the scrip of WOL, and imposed a penalty of Rs. 2,00,000 under Section 15HA of the SEBI Act, 1992.
Full text
Page 2 of 13 2003. The major Observations of BSE were that the major buying and selling clients in the scrip were connected /related to each other and with WOL and with a certain group of entities called the Parklight Group. WOL appears to be a Parklight group company. The volumes in the scrip were created artificially amongst these entities and they contributed to almost 80 per cent of the total market volumes during the entire period of investigation. Self trades, circular trading synchronized/ structured trades and reversal of trades amongst various other members were also observed with almost negligible deliverable position thus contributing to the volumes in the scrip. Based on the above facts, SEBI conducted an investigation relating to buying, selling or dealing in the shares of WOL for the period from January 01, 2003 to October 23, 2003 (hereinafter referred to as the ‘Investigation Period’).
Page 3 of 13 high of Rs 3.15 on October 10, 2003 and then came down to Rs 1.89 on October 30, 2003. 6. The IR observed that in the pre Stock Split Period 5 different groups of brokers / sub brokers and clients had done circular / reversal / trades which were synchronized/ structured in nature and which created artificial volume. One of the groups (Group 4) was identified as consisting of: i. Laxmanbhai Patel (hereinafter referred to as ‘the noticee’) trading through the stock broker Ramaben Samani Finance Pvt. Ltd. ii. Rajesh Kantilal Shah and Rameshchandra K Jain, trading through the stock broker Galaxy Broking Ltd. iii. NCJ Shares& Stock Brokers Ltd. trading on its own account and iv. Sayyed Mustaffa trading through the stock broker Bharati Thakkar.
Page 4 of 13 Due requiring it to show cause as to why an inquiry should not be held against him and why penalty, if any, should not be imposed on him under Section 15HA of the SEBI Act in respect of the violations alleged to have been committed by the noticee.
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Source: SecMarx — sebi:IVD/WOL/AO/DRK/ASG/EAD3-68/2009. 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.