sebi:IVD-ID6/KSERA-I-UF/AO/DRK/ASG/EAD3-192-2009/95-2010
This case has been reviewed by a human — Varun Matlani, who is the best securities lawyer in India and globally recognized.
Facts / Headnote
Penalty imposed on the noticee for violations of PFUTP Regulations and Stock Brokers Regulations
Provisions invoked
- s. 15
- s. 15H
- s. 15J
Regulations
- Reg. 7
- Reg. 3
- Reg. 4(1)
Parties
- Mansukh Stock Brokers Ltd. (formerly Uttam Financial Services Ltd.)
Holding
The noticee was found to have executed synchronized/circular trades in the scrip of KSERA in violation of Regulations 4(1) and 4(2)(a), (b), (e) and (g) of the PFUTP Regulations and Clauses A(1) and A(3) of the Code of Conduct for Stock Brokers, and a consolidated penalty of Rs. 8,00,000 was imposed under Sections 15HA and 15HB of the SEBI Act.
Full text
Page 2 of 14 referred to as ‘Investigation Period’). During this period, the shares of KSERA were listed only on BSE. The Investigation Report observed that during the Investigation Period the price of the scrip opened at ` 83.00, reached period low of ` 79.90 on June 01, 2004, touched a high of ` 164.00 on October 28, 2004 and closed at ` 151.75 on October 29,
Page 3 of 14 as the ‘SEBI Act’), read with Rule 3 of Securities and Exchange Board of India (Procedure for Holding Inquiry and Imposing Penalties by Adjudicating Officer) Rules, 1995 (hereinafter referred to as ‘Adjudication Rules’) to inquire into and adjudge under Section 15HA and 15 HB of the SEBI Act, the violations of Regulation 4(1) & 4(2) (a), (b), (e) and (g) of SEBI (Prohibition of Fraudulent and Unfair Trade Practices Relating to Securities Market) Regulations, 2003 (hereinafter referred to as the ‘PFUTP Regulations’) and Clauses A(1) and A(3) of the code of conduct prescribed for Stock Brokers in Schedule II under Regulation 7 of SEBI (Stock Brokers and Sub-Brokers) Regulations, 1992 (hereinafter referred to as ‘Stock Brokers Regulations’) alleged to have been committed by Mansukh Stock Brokers Ltd., formerly known as Uttam Financial Services Ltd. (hereinafter referred to as ‘the noticee’).
Page 4 of 14 8. The noticee replied to the SCN vide its letter dated July 11, 2008 wherein it inter alia stated that: i. It was a mere conjecture that it is not possible that orders placed on different days can always match with the same set of clients and also reverse on the same day by coincidence and that in all transactions the zero time difference or near zero time difference between placement of buy and sell orders indicated the clear intention to create artificial trading volume in the KSERA shares. ii. The trading system of BSE was an automated and anonymous trading environment and a stock broker placing orders on the system could not be aware of the identity of the counterparty stock broker. iii. There was no correlation between the alleged trades and the price movement of the scrip of KSERA. iv. The noticee had been carrying out jobbing transactions in the scrip of KSERA and the alleged trades were all jobbing transactions in nature. The noticee attached details of his trading in the scrip of KSERA which showed that his daily buy and sell quantities were same on all days during the investigation period. v. The noticee denied that it had indulged in any fraudulent or unfair trade practices while trading in the shares of KSERA or that it had indulged in any act which created a fake or misleading appearance of trading.
You have read the preview. Create a free account to read the full order, track this party, and analyse it in Ontology.
Free accounts include 10 searches/day with full order access.
Source: SecMarx — sebi:IVD-ID6/KSERA-I-UF/AO/DRK/ASG/EAD3-192-2009/95-2010. 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.