sebi:ORDER/SBM/KL/2021-22/14430

SEBI · SEBI · 2006-05-25 · Suresh B Menon, Adjudicating Officer

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Facts / Headnote

Adjudication proceedings against the Noticee disposed of without imposition of penalty

Provisions invoked

• s. 11
• s. 15
• s. 19
• s. 12A
• s. 15H

Regulations

• Reg. 3
• Reg. 199
• Reg. 200

Parties

• Arth Stock Broking Private Limited

Holding

The Adjudicating Officer disposed of the adjudication proceedings against Arth Stock Broking Private Limited, initiated via SCNs dated June 16, 2006 and April 28, 2011, without imposing any penalty, as the Noticee's role in the IPO irregularities could not be conclusively established.

Full text

Adjudication order in respect of Arth Stock Broking Private Limited. Page 2 of 22 investors in fictitious and benami names. In this regard, it is alleged that the said practice was adopted to corner the quota for retail investors in the IPOs of the companies. On allotment of the aforesaid shares in the category of retail investors in the IPOs, the shares were then transferred by the allottees to the demat account of these key operators. It is alleged that the key operators subsequently transferred the shares to Noticee’s account through off-market deals/transactions. As the Noticee had been the ultimate beneficiary, it is alleged that Noticee was the financier of the key operators in the whole process.

Adjudication order in respect of Arth Stock Broking Private Limited. Page 3 of 22 matter, vide order dated December 10, 2008. Thereafter, pursuant to transfer of Shri D Ravi Kumar to another department, the undersigned was appointed as the AO in the matter vide communique dated June 22, 2015.

Adjudication order in respect of Arth Stock Broking Private Limited. Page 4 of 22 alleged that you were the financier of the key operators in the whole process iii. It is alleged that in the illegal way as mentioned above you had acquired / cornered large number of shares in the IPOs by the following companies. In view of the above actions you are alleged to have violated the provisions of Section 12A of the SEB! Act Regulation 3, 4 and 6 of SEBI (Prohibition of Fraudulent and Unfair Trade Practices relating to Securities Market) Regulations, 1995 and Regulation 3 and 4 of SEBI (Prohibition of Fraudulent and Unfair Trade Practices relating to the Securities Market) Regulations, 2003.

Source: SecMarx — sebi:ORDER/SBM/KL/2021-22/14430. 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.