sebi:Order/SM/AR/2018-19/323-324

SEBI · SEBI · 2014-06-04 · Suresh B. Menon, Adjudicating Officer

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Facts / Headnote

Adjudication proceedings disposed of; allegations against both Noticees dropped, no penalty imposed

Provisions invoked

• s. 15
• s. 15H

Regulations

• Reg. 7
• Reg. 3
• Reg. 3(a)

Parties

• M/s Setu Securities Pvt Ltd
• M/s Mansi Shares and Stock Advisors Pvt Ltd

Holding

The Adjudicating Officer held that Noticee 1 (Setu Securities) did not violate the PFUTP Regulations through self-trades in PVPVL, and consequently Noticee 2 (Mansi Shares) did not violate clause A(2) of the Stock Brokers Code of Conduct. The proceedings were disposed of without imposition of any monetary penalty on either Noticee.

Full text

Page 2 of 14 FACTS OF THE CASE 1. Securities and Exchange Board of India (hereinafter referred to as 'SEBI') had conducted an investigation into the trading activities in the scrip of PVP Ventures Ltd. (hereinafter referred to as ‘PVPVL’) for the period May 04, 2009 to December 31, 2009 (hereinafter referred to as ‘investigation period’). During the course of investigation, it was observed that M/s Setu Securities Pvt Ltd (hereinafter referred to as ‘Setu’ / ‘Noticee 1’) while trading through its stock broker viz. Mansi Shares and Stock Advisors Pvt Ltd (hereinafter referred to as ‘Mansi’ / ‘Noticee 2’) had executed self-trades in the scrip of PVPVL on the Bombay Stock Exchange (hereinafter referred to as ‘BSE’) and National Stock Exchange (hereinafter referred to as ‘NSE’) during the above mentioned investigation period. It was therefore alleged that Noticee 1 has violated the provisions of regulations 3(a), (b), (c), (d), 4(1), 4(2)(a) and 4 (2)(g) of SEBI (Prohibition of Fraudulent and Unfair Trade Practices relating to Securities Market) Regulations, 2003 (hereinafter referred to as ‘PFUTP Regulations’). It was also alleged that Noticee 2, as a registered stock broker, had failed to exercise due care and diligence while dealing in the scrip of PVPVL on behalf of its client i.e Noticee 1 during the aforementioned investigation period and therefore, it was alleged that Noticee 2 has violated the provisions of clause A(2) of the Code of Conduct prescribed for Stock Brokers c

Page 3 of 14 dated June 22, 2015 to inquire into and adjudge under the provisions of section 15- I(1) of the SEBI Act read with rule 3 of SEBI (Procedure for Holding Inquiry and Imposing Penalties by Adjudicating Officer) Rules, 1995 (hereinafter referred to as ‘Adjudication Rules’) under the provisions of sections 15HA and 15HB of the SEBI Act for the alleged violations of relevant provisions of law by the Noticees, as mentioned above.

Page 4 of 14 d) In view of above, it is alleged that the Noticee 1 had indulged in self-trades in the shares of PVPVL, which were manipulative/unfair/fraudulent in nature as no actual beneficial ownership of shares changed in such types of transaction and these transactions were only meant to create false and misleading appearance of trading in the scrip of PVPVL in the securities market. Allegedly, by indulging into such kinds of trading, Noticee 1 had violated the provisions of Regulations 3 (a), (b), (c) & (d), 4 (1) and 4 (2) (a) & 4 (2) (g) of the PFUTP Regulations. Further, it is also alleged that Noticee 2 had failed to exercise due skill and care and diligence while placing /executing such buy/sale orders of self-trades on behalf of Noticee 1, in the shares of PVPVL from its terminal and upon such failure had allegedly violated the provisions of clause A (2) of the Code of Conduct of the Stock Brokers Regulations

Source: SecMarx — sebi:Order/SM/AR/2018-19/323-324. 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.