sebi:IVD-ID2/KIL/AO/DRK/AKS/EAD-3/219-09/123-10
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Facts / Headnote
Ex-parte penalty imposed on sub-broker Star Corporation for fraudulent and unfair trade practices and code of conduct violations
Provisions invoked
- s. 15
- s. 15H
- s. 15J
Regulations
- Reg. 4
- Reg. 3
- Reg. 4(1)
- Reg. 15
Parties
- Star Corporation
Holding
The Adjudicating Officer held that sub-broker Star Corporation violated Regulations 4(1) and 4(2)(a), (b), (e), (g), (n) of the PFUTP Regulations, 2003 and Clauses A(1), A(2), D(1), (4), (5) of the Code of Conduct for Sub Brokers by assisting its client in executing synchronized and reversal trades in the scrip of KIL, and imposed a consolidated penalty of Rs. 75,000 under Sections 15HA and 15HB of the SEBI Act.
Full text
Page 2 of 14 a. During the investigation period, the price of the scrip increased from ` 4.25 to ` 42.90, a 909% rise, with an average daily volume of 70,000 shares. b. Sub broker Star Corporation (here in after referred to as ‘the noticee’) trading through B.R. Jalan Securities Pvt. Ltd. (here in after referred to as ‘BRJ’) for its client Shri Gautam Vaghasiya, was the major client accounted for 26-27% of the total traded volumes. c. There were synchronized trades between BRJ and Wellworth Share and Stock Broking Ltd. (here in after referred to as ’WSS’) for 7% of the total traded volumes during the investigation period. d. Analysis of the first trades shows that on majority of the days, the stock broker BRJ on behalf of noticee’s client, Shri Gautam Vaghasiya, had placed buy orders which had resulted in first trades and established the opening price at / or near upper circuit rates / intra-day high price.
Page 3 of 14 Practices Relating to Securities Market) Regulations, 2003 (hereinafter referred to as ‘PFUTP Regulations’) and Clauses A(1), (2), D(1), (4), (5) of the code of conduct prescribed for Sub Brokers in Schedule II under Regulation 15 of SEBI(Stock Brokers and Sub-Brokers) Regulations, 1992 (hereinafter referred to as ‘Sub Broker Regulations’) alleged to have been committed by the noticee.
Page 4 of 14 the noticee was given opportunities to present its case, I am fully convinced that Principles of Natural Justice is complied with. In view of the above and in the absence of any response from the noticee, I am compelled to pass an ex-parte order against the noticee based on the material made available on record. CONSIDERATION OF EVIDENCE AND FINDINGS
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Source: SecMarx — sebi:IVD-ID2/KIL/AO/DRK/AKS/EAD-3/219-09/123-10. 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.