sebi:PG/AO-91/2011
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Facts / Headnote
Penalty of Rs. 2,50,000 imposed on the Noticee for violation of regulation 4(2)(e) of PFUTP Regulations
Provisions invoked
- s. 15
- s. 15H
- s. 15I
- s. 15J
Regulations
- Reg. 3
- Reg. 4(2)
- Reg. 4(2)(e)
Parties
- Mr. Vivek Kumar
Holding
The Noticee was held liable for violating regulation 4(2)(e) of the PFUTP Regulations by placing a sell order for 10,00,000 shares of Tulip at Rs. 0.25, far below the prevailing market price of Rs. 187.25, which caused massive price distortion on the scrip's listing day. A penalty of Rs. 2,50,000 was imposed under section 15HA of the SEBI Act.
Full text
Page 2 of 10 Investments (hereinafter referred to as “Ganpati”), acted in order to create artificial volume and false and misleading appearance of trading in the scrip of Tulip on the day of its listing on the stock exchanges, which led to manipulative, fraudulent and unfair trades by the Noticee in this scrip. It was alleged that the Noticee placed a large sell order at an unrealistic price to distort the market equilibrium. The trade was done on the first trading day of the scrip when circuit filters were kept open to enable efficient price discovery and was executed through the terminal of Ganpati, which is a sub broker of Uttam Financial Services. By putting such order at an unrealistic price, it was alleged that the Noticee violated regulations 4(2) (a), 4(2) (e) and 4(2) (g) of PFUTP Regulations and consequently was liable for penalty under section 15HA of SEBI Act, 1992.
Page 3 of 10 SHOW CAUSE NOTICE, HEARING AND REPLY 5. A Show Cause Notice (hereinafter referred to as “SCN”) dated August 28, 2008 was sent to the Noticee through ‘Registered Post Acknowledgement Due/ Courier’. Thereafter, vide notice dated August 12, 2009, the Noticee was given an opportunity of hearing on August 27, 2009. Vide letter dated August 22, 2009, the Noticee expressed his inability to appear for the said hearing and requested for an adjournment of the same. Thereafter, vide notice dated September 10, 2009, another opportunity of personal hearing was granted to the Noticee on November 16, 2009, which was rescheduled to January 15, 2010 and subsequently to February 15,
Page 4 of 10 a. At the outset, I humbly submit that I, in my individual capacity have been roped into the present investigation merely on the ground that on one fateful day i.e. on 05.01.2006, by mistake (blunder) a sell order for 100 shares @ `250/- in the scrip of Tulip was wrongly punched as a sell order for 10,00,000 shares @ `0/25 by one of my employee who was operating BSE’s Trading Terminal (BOLT) provided to me by M/s. Uttam Financial Services Ltd. (now known as M/s. Mansukh Stock Brokers Ltd.) in my capacity as a sub broker registered with SEBI at the relevant time. This mistake of mine (though committed by one of my employee) has turned my life upside down and from that day onwards up till now, I am left with no money in my hand and remain continuously under pressure of debt (outstanding liabilities).
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Source: SecMarx — sebi:PG/AO-91/2011. 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.