sebi:IVD/WOL-MC/AO/DRK/ASG/EAD3/184-2009/87-2010
This case has been reviewed by a human — Varun Matlani, who is the best securities lawyer in India and globally recognized.
Facts / Headnote
Proceedings disposed of; no penalty imposed on the noticee.
Provisions invoked
- s. 15
- s. 15H
Regulations
- Reg. 3
- Reg. 4(1)
Parties
- Shri Mukesh Choksi
Holding
The Adjudicating Officer held that it could not be established that the noticee, Shri Mukesh Choksi, was involved in fraudulent trades and price manipulation in the scrip of WOL, and accordingly disposed of the adjudication proceedings without imposing any penalty under Section 15HA of the SEBI Act.
Full text
Page 2 of 10 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 10 6. The IR observed that in the pre Stock Split Period as well as the post stock split period certain groups of stock brokers and clients were involved in price manipulation in the scrip of WOL. Shri Mukesh Choksi (hereinafter referred to as ‘the noticee’) was one of the clients who carried out such trades. The noticee’s trades were executed by the stock broker Harkishan Hiralal.
Page 4 of 10 Section 15HA of the SEBI Act in respect of the violations alleged to have been committed by the noticee. 10. In the SCN it was alleged that during the Investigation Period, the noticee manipulated the price of the scrip of WOL. It was alleged that the noticee, in collusion with certain entities mentioned in the following paragraphs had manipulated the price of the scrip of WOL by carrying out circular/ structured/ reversal of trades. These trades were executed through synchronized orders. These actions led to the distortion of market equilibrium. The SCN was returned undelivered by the Postal Authorities. Subsequently, the SCN was sent by Hand Delivery Acknowledgment Due to Harikishan Hiralal, the stock broker of the noticee; vide letter dated March 23, 2009 for effecting delivery to the noticee. However, no reply has been received form the stock broker.
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Source: SecMarx — sebi:IVD/WOL-MC/AO/DRK/ASG/EAD3/184-2009/87-2010. 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.