sebi:Order/PM/AS/2022-23/15948

SEBI · SEBI · 2021-07-16 · Priyanka Mahapatra, Adjudicating Officer

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Facts / Headnote

Violation established; penalty of Rs. 5,00,000 imposed under Section 15HA

Provisions invoked

• s. 15
• s. 15H
• s. 15I
• s. 15J
• s. 15F
• s. 28A

Regulations

• Reg. 3
• Reg. 3(a)

Parties

• Manish Gupta

Holding

The Noticee violated Regulations 3(a), (b), (c), (d), 4(1) and 4(2)(a) of the PFUTP Regulations, 2003 by executing non-genuine reversal trades in illiquid stock options, and a monetary penalty of Rs. 5,00,000 under Section 15HA was imposed.

Full text

Adjudication Order in respect of Manish Gupta in the matter of dealings in illiquid Stock Options at BSE Page 2 of 11 to conduct the adjudication proceedings in the manner specified under Rule 4 of Adjudication Rules read with Section 15 I (1) and (2) of SEBI Act, 1992, and if satisfied that penalty is liable, impose such penalty as deemed fit in terms of Rule 5 of Adjudication Rules and Section 15HA of the SEBI Act, 1992. SHOW CAUSE NOTICE, REPLY AND HEARING

Adjudication Order in respect of Manish Gupta in the matter of dealings in illiquid Stock Options at BSE Page 3 of 11 7.2. While dealing in the said contract on 29/07/2015, at 11:30:52.09 hrs, the Noticee entered into a buy trade with counterparty PRM Power & Project Private Limited for 20,000 units at Rs. 6.25 per unit. At 11:30:55.59 hrs the Noticee entered into a sell trade with the same counterparty, for 20,000 units. 7.3. The Noticee’s two trades while dealing in the above said contract during the Investigation Period allegedly generated artificial volume of 40,000 units, which made up 100% of total market volume in the said contract during this period.

Adjudication Order in respect of Manish Gupta in the matter of dealings in illiquid Stock Options at BSE Page 4 of 11 terms of Rule 4(7) of the Adjudication Rules and the matter may be proceeded ex parte on the basis of material available on record. In the absence of any response to the SCN, I presume that the Noticee has admitted the charges levelled against it. In this respect, I place reliance on the judgement passed by Hon’ble SAT in the matter of Classic Credit Ltd. vs. SEBI [Appeal No. 68 of 2003 Date of Decision: December 08, 2006] where it was inter alia observed, "......the appellants did not file any reply to the second show cause notice. This being so, it has to be presumed that the charges alleged against them in the show cause notice were admitted by them”. I also place reliance on the judgment passed by Hon’ble SAT in the matter of Sanjay Kumar Tayal & Others vs. SEBI [Appeal No. 68 of 2013, Date of Decision: February 11, 2014] where it was inter alia held, “..... appellants have neither filed reply to show cause notices issued to them nor availed opportunity of personal hearing offered to them in the adjudication proceedings and, therefore, appellants are presumed to have admitted charges levelled against them in the show cause notices...”.

Source: SecMarx — sebi:Order/PM/AS/2022-23/15948. 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.