sebi:MO/111/MIRSD/10/04

SEBI · SEBI · 2004-08-31 · A K Batra, Whole Time Member

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Facts / Headnote

Interim prohibition on the sub-broker from buying, selling or dealing in securities, directly or indirectly, with immediate effect, pending enquiry proceedings.

Provisions invoked

• s. 11B
• s. 11
• s. 11(4)
• s. 19
• s. 11(1)

Regulations

• Reg. 200

Parties

• Shri Sameer K. Chotai (Trade Name: Om Shares & Securities)

Holding

The Whole Time Member ordered that Shri Sameer K. Chotai, operating under trade name Om Shares and Securities, be prohibited from buying, selling or dealing in securities in any manner, directly or indirectly with immediate effect, pending initiation and completion of enquiry proceedings.

Full text

Home » Enforcement » Orders » Orders of Chairman/Members Enforcement Enforcement▼ Order against Shri Sameer K Chotai Oct 14, 2004 | Orders : Orders of Chairman/Members SECURITIES AND EXCHANGE BOARD OF INDIA

Registration No. INS011251019), of the Stock Exchange, Mumbai (BSE) (hereinafter referred to as the sub-broker). Securities and Exchange Board of India (SEBI) had received complaints against certain entities/ persons carrying out illegal trading activities at Porbandar, Gujarat, following which SEBI advised BSE to analyse the turnover data, location of terminals, trading pattern and history/ background of the entities concerned and send their report on the same to SEBI. 2.0 INSPECTION 2.1 After analyzing the trade data, in order to establish whether any of the entities have actually indulged in illegal trading, BSE carried out inspections including that of the sub-broker on June 28, 2004. Following the inspection, it was reported by BSE that when their officials visited the office of the sub-broker, a register was found in the hands of one Shri Tejas, brother of the sub-broker. The register contained date- wise details of the trades and when asked for explanation, Shri Tejas and the sub- broker admitted that the register contained the details of trades done illegally by them i.e. without reporting on the BOLT system of the BSE. A photostat copy of the said register signed by the sub-broker has been furnished to SEBI by the BSE. 2.2 The BSE further observed as under: 2.2.1 the sub-broker had been entering into and executing trades outside the trading mechanism of BOLT provided by BSE and settling such illegal trades in cash on a weekly/ fortnightly/ monthly basis; 2.2.2 compar

2.3 BSE also reported that the sub-broker indulged in coercive tactics to persuade BSE officials not to report their findings to SEBI. The above, prima facie, showed that the sub-broker had indulged in illegal activities that are not in the interest of the investors and which are not conducive to the orderly development and growth of the securities market and that endanger the safety and integrity thereof. 2.4 The above prima facie reveals that the sub-broker has violated provisions of the Securities and Exchange Board of India Act, 1992, SEBI (Stock Brokers and Sub Brokers) Rules and Regulations, 1992, the Code of Conduct as specified in Schedule II of the SEBI (Stock-Broker and Sub-Broker) Regulations, 1992, various directives/ circulars issued by SEBI and the Bye-laws/ Business Rules/ Regulations of BSE and by virtue of which the sub-broker had ceased to be a fit and proper person in terms of the SEBI (Criteria for Fit and Proper Person) Regulations, 2004. These activities are highly unbecoming of a registered sub- broker and are also in violation of the SEBI (Prohibition of Fraudulent and Unfair Trade Practices Relating to Securities Markets) Regulations, 2003. 3.0 SHOW CAUSE NOTICE AND HEARING 3.1 In view of the above, a show cause notice dated August 31, 2004 was issued to the sub-broker asking him to show cause as to why interim directions prohibiting him from selling, buying or otherwise dealing in securities should not be passed against him under section 11(4) read w

Source: SecMarx — sebi:MO/111/MIRSD/10/04. 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.