sebi:SD/AO/05/2013
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Facts / Headnote
Penalty imposed on the Noticee for violations of PFUTP Regulations and Brokers Regulations
Provisions invoked
- s. 15
- s. 15H
- s. 15J
Regulations
- Reg. 7
- Reg. 4
- Reg. 3
- Reg. 4(1)
Holding
The Noticee (a stock broker) was found to have violated Regulations 4(1), 4(2)(a) and (e) of the PFUTP Regulations and Clauses A(1), A(2), A(3) and A(4) of the Code of Conduct under Regulation 7 of the Brokers Regulations, and a total monetary penalty of Rs. 10,00,000 was imposed (Rs. 7,00,000 under Section 15HA and Rs. 3,00,000 under Section 15HB of the SEBI Act).
Full text
Page 2 of 11 70% of the gross sales. The Noticee along with other brokers had traded in the scrip of MCL on behalf of its clients wherein it had purchased 5,79,173 shares (19.50%) and sold 2,80,242 shares (9.44%). The Noticee also traded in its own account wherein it has bought and sold 850 shares. The Noticee has mainly traded for three clients' viz., Shri Ramasudhkaran Menon, Shri Rajender Kumar Adhukia and Shri Akhilesh Kamal Prasad Mishra. The investigation reveals that the Noticee placed 151 buy orders at the subsequent higher prices than the last traded price which led to the increase in the price of the scrip from ` 78 to ` 242. The Noticee was asked to comment on these buy orders during the investigation and it replied stating it was entirely client's choice and decision to place orders in the scrip. It appeared from the above that the Noticee failed to exercise enough due diligence and precaution and entered into manipulative trades. The noticee also influenced the price of the scrip by putting the buy order at higher prices.
Page 3 of 11 Act, the alleged violation of provisions of the PFUTP Regulations and Brokers Regulations. Show Cause Notice, Reply & Personal hearing
Page 4 of 11 10. An opportunity of personal hearing was granted to the Noticee vide Notice of hearing dated October 15, 2009 on November 04, 2009. However, vide letter dated November 3, 2009, the noticee sought extension to appear as the concerned officer has fallen ill.
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Source: SecMarx — sebi:SD/AO/05/2013. 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.