sebi:IVD/WOL-NB/AO/DRK/ASG/EAD3/153-2009/56-2010
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Facts / Headnote
Noticee found liable and penalty of Rs. 75,000 imposed under Section 15HA
Provisions invoked
- s. 15
- s. 15H
- s. 15J
Regulations
- Reg. 3
- Reg. 4(1)
- Reg. 199
- Reg. 31
Parties
- Nilesh H. Bhuta
Holding
The noticee violated Regulations 3, 4(b) of the PFUTP Regulations, 1995 read with Regulations 4(1), 4(2)(a), (b) and (g) of the PFUTP Regulations, 2003 by executing synchronized/structured/circular trades creating artificial volume in WOL, and a penalty of Rs. 75,000 under Section 15HA of the SEBI Act was imposed.
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 with each other, with WOL and a certain group of entities called the Parklight Group. WOL appears to 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 several groups of clients and stock brokers had traded significantly in the scrip and that the trades executed among the group were synchronized/ structured/ circular/ reversal in nature. One of the groups was identified as consisting of: a. The stock broker Jitendra Harjivandas trading for the client Harish Kapadia; b. Sub-broker Vijay J Thakkar through main stock broker VSE Stock Services Ltd. trading for the client Smt. Parul Shah c. Sub broker Kankeshwari Securities Pvt. Ltd through main stock broker Action Financial Services (India) Ltd. trading for the client Piyush M Shah; d. Pilot Credit Capital Ltd. trading for the client Piyush M Shah; e. Pennisular Capital Market Ltd. trading for the client Nilesh H Bhuta. hereinafter referred to as ‘the noticee’);
Page 4 of 13 SHOW CAUSE NOTICE, HEARING AND REPLY 8. A Show Cause Notice A&E/BS/ASG/124393/2008 dated April 30, 2008 (hereinafter referred to as ‘SCN’) was served on the noticee in terms of the provisions of the Adjudication Rules by Registered Post Acknowledgment Due requiring him 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-NB/AO/DRK/ASG/EAD3/153-2009/56-2010. 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.