sebi:MO/91/MIRSD/01/06

SEBI · SEBI · 2005-04-08 · Madhukar, Whole Time Member

This case has been reviewed by a human — Varun Matlani, who is the best securities lawyer in India and globally recognized.

Facts / Headnote

warning with direction to be more cautious

Provisions invoked

• s. 19
• s. 12

Regulations

• Reg. 7
• Reg. 13(4)
• Reg. 5(1)
• Reg. 13(2)
• Reg. 200

Parties

• Lalkar Securities Pvt. Ltd.

Holding

The Whole Time Member warned M/s. Lalkar Securities Pvt. Ltd., member BSE bearing SEBI Registration No. INB010991133, and directed it to be more cautious and adhere to the SEBI Act, 1992 and rules and regulations thereunder.

Full text

Home » Enforcement » Orders » Orders of Chairman/Members Enforcement Enforcement▼ Order against Lalkar Securities Pvt. Ltd Jan 12, 2006 | Orders : Orders of Chairman/Members MO/91/MIRSD/01/06 SECURITIES AND EXCHANGE BOARD OF INDIA

1.1 M/s. Lalkar Securities Pvt. Ltd. (hereinafter referred to as “the broker”) is a member of The Stock Exchange, Mumbai (“BSE”) registered with SEBI as a stock broker under section 12 of SEBI Act, 1992 with SEBI Registration No. INB010991133. 1.2 Inspection of the books of accounts, documents and other records of the broker was carried out by SEBI for the period 2000-01, 2001-02 i.e till 31.8.2002 and certain irregularities found to have been committed by the broker were observed. 2.0 ENQUIRY PROCEEDINGS 2.1 In view of the above, an Enquiry Officer (EO) was appointed vide SEBI Order dated December 16, 2003 under Regulation 5(1) of SEBI (Procedure for Holding Enquiry) Regulations, 2002 (hereinafter referred to as the “said Regulations”) to inquire into the irregularities observed during the inspection of books of accounts of the broker. The EO after conducting the enquiry in terms of the said regulations submitted his report on 18.03.05 and recommended imposition of a minor penalty of censure on the broker. 2.2 A copy of the Enquiry Report was sent to the broker on 29.03.05, in terms of Regulation 13(2) of the said Regulations, advising him to show cause as to why appropriate penalty including the penalty as recommended by the Enquiry Officer should not be imposed. 2.3 The broker replied vide letter dated 08.04.05 and sought extension of time upto 15 days and thereafter replied to the show cause notice vide letter dated 21.4.05. The broker submitted that it has not violated a

3.1 I have carefully considered the findings of inspection, Enquiry and the submissions made by the broker. Though the inspection report lists a number of violations alleged to have been committed by the broker, the EO has found the broker guilty of only one violation, as follows: 3.2 It was alleged that the broker failed to report off the floor transactions to the exchange. The broker submitted that the above finding refers to a single transaction of 50 shares of Ranbaxy done by clients without the specific permission or knowledge of the broker and that the broker was aware of it only through the inspection. The broker admitted the mistake and stated that it was not a negotiated deal or cross deal and the same should have been done on the exchange. The broker stated that there was no malafide intention and the brokerage earned was only Rs.57/-. An isolated transaction of 50 shares in a heavily traded scrip of Ranbaxy cannot be interpreted as an intentional violation of SEBI Circular. The EO found that even if the transaction is a single one, it is a violation of the SEBI Circular SMDRP/POLICY/CIR-32/99. In this regard the EO found that the broker is guilty of violating the Code of Conduct as enumerated in Regulation 7 of the SEBI (Stock Brokers and Sub Brokers) Regulations, 1992 as he has failed to observe the provisions of SEBI Circular SMDRP/POLICY/CIR-32/99 with respect to reporting of the off market deal to the exchange. 3.3 With regard to other charges like not maintain

Source: SecMarx — sebi:MO/91/MIRSD/01/06. 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.