sebi:ORDER/GR/AE/2019-20/3505
This case has been reviewed by a human — Varun Matlani, who is the best securities lawyer in India and globally recognized.
Facts / Headnote
Noticee held liable for contravention of PFUTP Regulations; penalty imposed (amount not specified in extract)
Provisions invoked
- s. 15
- s. 11B
- s. 11
- s. 15H
- s. 15J
- s. 15F
- s. 28A
Regulations
- Reg. 4
- Reg. 3
- Reg. 2(1)(c)
- Reg. 4(1)
- Reg. 2
- Reg. 3(a)
- Reg. 2(1)
- Reg. 2(1)(c)(8)
Parties
- GKS Technology Park Private Limited
Holding
The Noticee was found to have executed non-genuine reversal trades in 18 illiquid stock option contracts on BSE, generating artificial volume and creating a false and misleading appearance of trading, in contravention of Regulations 3(a),(b),(c),(d) and 4(1), 4(2)(a) of the PFUTP Regulations.
Full text
Adjudication Order in respect of GKS Technology Park Private Limited Page 2 of 29 same day. It was alleged that these reversal of trades of the Noticee were non- genuine in nature and have created false and misleading appearance of trading in terms of artificial volumes in the stock options segment of BSE.
Adjudication Order in respect of GKS Technology Park Private Limited Page 3 of 29 SHOW CAUSE NOTICE, REPLY AND PERSONAL HEARING
Adjudication Order in respect of GKS Technology Park Private Limited Page 4 of 29 ix. Show Cause Notice is erroneous in as much as it is only a belated coercive use of power / action in terms of which power is sought to be used against 3 - 4 years back settled trades on the basis of wrong interpretation of power deemed to have been existed with SEBI under PFUTP Regulations. x. The Show Cause Notice does not specify and consider facts matrix of our dealings in stock options segment of BSE. It does not stale the reasons, rational, cause of action, locus and invoking of jurisdiction after over 3 years from the dates of settled transactions. The Show Cause Notice is therefore arbitrary. xi. The Show Cause Notice fails to appreciate that when SEBI itself has not discharged its obligations of quick investigation, seeking explanation of the parties at that time, declaring trades in stock options as illegal at the relevant time, subjecting to us to adjudication proceeding belatedly in unfair, unreasonable and absurd.
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Source: SecMarx — sebi:ORDER/GR/AE/2019-20/3505. 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.