sebi:PKK/AO/251/2010
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Facts / Headnote
Penalty imposed on the Noticee for violating PFUTP Regulations
Provisions invoked
- s. 15
- s. 15H
- s. 15J
Regulations
- Reg. 4
- Reg. 3
- Reg. 4(1)
Parties
- Mr. Sandeep Kadam
Holding
The Noticee, Mr. Sandeep Kadam, was found to have violated Regulations 4(1), 4(2)(a), (b), (e), and (g) of the PFUTP Regulations, 2003 by engaging in off-market and synchronized trades with connected entities that created misleading appearance of trading and artificial volume in the scrip of MCL, and a monetary penalty of Rs. 1,00,000 was imposed under Section 15HA of the SEBI Act, 1992.
Full text
Page 2 of 8 till further directions are given. Mr. Sandeep Kadam was one of the entities named in the said Order. 3. The investigations revealed that 42 entities were allegedly involved in manipulating the price of MCL. Out of the 42 entities, 33 entities were allegedly found to be connected to each other. They had common address and/or common contact number. Further, some of the connected entities transferred shares of MCL among themselves through off market trades and some of them shared common directorships in associate companies. These entities apparently entered into off-market/synchronized and structured deals that led to creation of misleading appearance of trading and artificial volume in the scrip. The dealings of the above nature had distorted market equilibrium leading to sudden spurt in the volume and price of the scrip.
Page 3 of 8 undersigned as the AO subsequent to the transfer of Shri Deore to the Enforcement Department. Show Cause Notice, Reply & Personal hearing
Page 4 of 8 10. As the Noticee has not put up any defence or challenged the show cause notice, it can be assumed that the charges levelled in the show cause notice have been accepted by the Noticee. This is in accordance with the principle laid by Hon’ble Securities Appellate Tribunal in the matter of Classic Credit Ltd. v. SEBI1 wherein it was inter-alia held that “…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”. However, in order to pass a speaking order, the undersigned is going to analyse the evidence and allegations against the Noticee.
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Source: SecMarx — sebi:PKK/AO/251/2010. 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.