sebi:PKK/AO/175/2011
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Facts / Headnote
Noticee held liable and total monetary penalty of Rs.2,00,000 imposed
Provisions invoked
- s. 15
- s. 15H
- s. 15J
Regulations
- Reg. 7
- Reg. 3
Parties
- M/s. Ramaniklal Mohanlal Capital Markets Pvt. Ltd.
Holding
The Noticee violated Regulations 3(a), 3(c), 3(d), 4(1), 4(2)(a) and 4(2)(e) of the PFUTP Regulations and Clauses A(2), (3) & (4) of the Code of Conduct for Stock Brokers, warranting penalty under Sections 15HA and 15HB of the SEBI Act. A total penalty of Rs.2,00,000 was imposed on the Noticee.
Full text
Page 2 of 14 2009 to July 23, 2009) wherein price rose from Rs.340.00 to Rs.531.65 and closed at Rs.492.80 in 9 trading days with an average daily volume of 11,850 shares. A price fall was also observed during the period from June 08, 2009 to June 23, 2009 wherein price fell from Rs.458 to Rs.325.95 and closed at Rs.329.70 in 12 trading days with an average daily volume of 8,845 shares. The Investigation revealed that a group of clients connected to each other one way or the other indulged in circular/reversal of trades, synchronized trades and other fictitious trades to create artificial volume and false appearance of trading which resulted in sudden spurt in the price and volume in the scrip during the investigation period. M/s. Ramaniklal Mohanlal Capital Markets Pvt. Ltd. (hereinafter referred to as the ‘Noticee’) is alleged to have aided and abetted the manipulation in the scrip.
Page 3 of 14 Show Cause Notice, Reply and Personal Hearing 5. The undersigned issued a notice dated June 02, 2011 (hereinafter referred to as the ‘SCN’) under Rule 4 of the Adjudication Rules to the Noticee to show cause as to why an inquiry should not be held against it and penalty be not imposed under Sections 15 HA and 15HB of the SEBI Act for its alleged violation of the abovementioned provisions of the PFUTP Regulations and Stock Brokers Regulations.
Page 4 of 14 with sub-broker Janak Shah of the broker Sykes & Ray Equities (I) Ltd. and had also introduced Janak Shah to Sunil Mehta. Then, Mr. Pravin Kulkarni and Mr. Janak Shah introduced Suresh Hanswal and Sunil Mehta to the Noticee. Mr. Pravin, Mr. Shah, Mr. Hanswal and Mr. Mehta approached the Noticee to open a trading terminal at Udaipur. The Noticee opened an IML terminal at Udaipur at the residence address of Suresh Hanswal. Suresh Hanswal was the Noticee’s terminal operator at Udaipur. The Noticee had never seen the client Renu Paliwal. The account opening form of Renu Paliwal was filled up and forwarded by Suresh Hanswal from Udaipur to the Noticee at Mumbai. The trading account of only one client Renu Paliwal was operated from Udaipur terminal during the period January 28. 2009 till close of its trading operation on June 18, 2009. No margin was taken by the Noticee for the trading of the client Renu Paliwal. The contract notes of the trades of Renu Paliwal were delivered to Janak Shah as per her request. On perusal of Renu Paliwal’s authority letter, it is observed that Mr. Janak Shah was authorized to receive the contract notes. However, neither the address nor the contact no. of Janak Shah was mentioned in the said authority letter. Further, Sunil Mehta introduced client Madhusudan Paliwal (husband of Renu Paliwal) to one broker Triveni Management Consultancy Services Ltd. Sunil Mehta is was friend of Madhusudan Paliwal. Thus, the Noticee is allegedly related/co
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Source: SecMarx — sebi:PKK/AO/175/2011. 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.