sebi:SD/AO/121/2009
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Facts / Headnote
Penalty of Rs. 2,00,000 imposed on the Noticee under Section 15HA of the SEBI Act for violating PFUTP Regulations
Provisions invoked
- s. 15
- s. 15H
- s. 15J
Regulations
- Reg. 3
- Reg. 2(1)(c)
- Reg. 3(a)
Parties
- Shri Prakash D'Souza
Holding
The Noticee, Shri Prakash D'Souza, was held liable for violating Regulations 3(a),(b),(c),(d) and 4(1), 4(2)(a),(b),(d),(e),(g) of the PFUTP Regulations by engaging in fraudulent dealings in the scrip of FTEL, and a penalty of Rs. 2,00,000 was imposed under Section 15HA of the SEBI Act.
Full text
Page 2 of 13 report (hereinafter referred to as ‘IR’) revealed that the scrip of FTEL was thinly traded prior to the investigation period. As per the information available on BSE website, 15,45,500 shares of FTEL were traded during the calendar year of 2003. Further, as per the IR, during the period of investigation i.e. from January 2004 to June 2004(six months), 85,15,574 shares of FTEL were traded at BSE which were far more than the traded volume of FTEL during the entire calendar year of 2003. From these above said figures, it can be inferred that the volume in the scrip of FTEL was very huge during above said six months of 2004 compared to the trading during the entire year of 2003. The scrip of FTEL was thinly traded in the year 2003. Further, there was no fundamental or justification for such sudden spurt in the volume and price in the scrip of FTEL. As per IR, various entities including the promoters of FTEL, some brokers and connected clients were allegedly found to have involved in the activities of manipulation of the scrip price of FTEL, a thinly traded scrip. The activities of these entities facilitated the creation of artificial volumes and influenced the price of the scrip of FTEL in the securities market. Hence, it is clear that the huge volume had been created through fraudulent dealings in the scrip of FTEL by various connected entities.
Page 3 of 13 APPOINTMENT OF ADJUDICATING OFFICER : 4. The undersigned was appointed as the Adjudicating Officer vide order of SEBI dated 20th February,2008 under section 15-I of the SEBI Act r/w Rule 3 of SEBI (Procedure for Holding Inquiry and Imposing Penalties by Adjudicating Officer) Rules,1995 (hereinafter referred to as the ‘Adjudicating Rules’) to inquire into and adjudge under Section 15HA of the SEBI Act, the alleged violations PFUTP Regulations committed by the Noticee. SHOW CAUSE NOTICE/REPLY/PERSONAL HEARING :
Page 4 of 13 lenient view on compassionate grounds. It is pertinent to note here that the Noticee had not replied to the SCN issued by the undersigned. CONSIDERATION OF ISSUES AND FINDINGS :
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Source: SecMarx — sebi:SD/AO/121/2009. 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.