sebi:PG/AO-92/2011
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Facts / Headnote
Penalty imposed: Rs. 2,00,000 under section 15HA and Rs. 3,00,000 under section 15HB of the SEBI Act (total Rs. 5,00,000) on M/s. Ganpati Investments for violation of regulations 4(2)(a) & 4(2)(e) of PFUTP Regulations and clauses A(2) & D(4) of Code of Conduct for sub-brokers read with regulation 15 of Broker Regulations.
Provisions invoked
- s. 15
- s. 15H
- s. 15I
- s. 15J
Regulations
- Reg. 3
- Reg. 4
- Reg. 4(2)
- Reg. 15
- Reg. 4(2)(a)
Parties
- Ganpati Investments (Proprietor: Mr. Vivek Kumar)
Holding
The Noticee, a sub-broker, was held liable for violating regulations 4(2)(a) and 4(2)(e) of the PFUTP Regulations and clauses A(2) and D(4) of the Code of Conduct for sub-brokers read with regulation 15 of the Broker Regulations by placing large orders at unrealistic prices on the day of listing of four scrips, thereby creating a misleading appearance of demand and distorting market equilibrium.
Full text
Page 2 of 16 2. Ganpati Investments (‘Ganpati/ Noticee’) is a sub-broker (SEBI Regn. No. INS 11219214) affiliated to broker, M/s Uttam Financial Services Ltd. Mr. Vivek Kumar (PAN No.- AEVPK8548L) is proprietor of Ganpati and has also traded as a client. The shares of M/s Tulip IT Services Limited (Tulip) were listed on BSE and NSE on January 05, 2006. It was observed that Mr. Dharmendra Kumar, client of sub-broker Ganpati Investments (hereinafter referred to as ‘Ganpati/ Noticee’), had dealt in the scrip of Tulip as well as other scrips on the day of their listing on the Stock Exchanges namely: PVR Films Ltd. (‘PVR’) [listed on January 04, 2006], Compulink System Ltd. (‘Compulink’ [ listed on December 28, 2005] and Repro India Ltd. (‘Repro’) [listed on December 22, 2005], and placed large sell/buy orders at unrealistic prices to distort the market equilibrium. These trades were done on the first trading day of these scrips when circuit filters were kept open to enable efficient price discovery and were executed through the terminal of Ganpati, which is a sub broker of Uttam Financial Services.
Page 3 of 16 Regulations and Broker Regulations respectively by the Noticee, as observed during the investigation conducted by SEBI into the affairs, trading and dealings in the shares mentioned above on the day of their listing.
Page 4 of 16 8. Thereafter, vide letter dated May 26, 2011, another opportunity of personal hearing was provided to the Noticee on June 22, 2011. The Noticee did not avail of the same, citing reasons of paucity of time to book confirmed train tickets to Mumbai, over the telephone. A final opportunity of hearing was hereby granted to the Noticee through letter dated June 27, 2011 on July 26, 2011. Mr. Prakash Shah appeared in the said hearing on behalf of the Noticee and sought for 15 days time to file a written reply in the said matter.
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Source: SecMarx — sebi:PG/AO-92/2011. 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.