sebi:SD/AO/51/2009
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Facts / Headnote
Penalty imposed on Noticee for violation of Code of Conduct for Stock Brokers; PFUTP Regulations violation not established
Provisions invoked
- s. 15
- s. 15H
- s. 15I
- s. 15J
Regulations
- Reg. 7
- Reg. 3
- Reg. 4
Parties
- M/s. Action Financial Services (India) Limited
Holding
The Noticee was held to have violated Clause A(2) of the Code of Conduct for Stock Brokers (due skill, care and diligence) under Regulation 7 of the Stock Brokers Regulations, warranting a monetary penalty of Rs.3,00,000 under Section 15HB of the SEBI Act. The allegation of violation of Regulations 4(1) and 4(2)(a), (b) & (e) of the PFUTP Regulations, 2003 was not established.
Full text
Page 2 of 16 2 APPOINTMENT OF ADJUDICATING OFFICER: 2. On the basis of the said investigation, Ms. Babita Rayudu was appointed as the Adjudicating Officer vide Order of SEBI dated August 03, 2007 under section 15-I of the SEBI Act, 1992 (hereinafter referred to as the ‘SEBI Act’) read with Rule 3 of SEBI (Procedure for holding Inquiry and Imposing Penalty by Adjudicating Officer) Rules, 1995 (hereinafter referred to as the ‘Adjudication Rules’) to inquire into and adjudge under Sections 15HA and 15HB of the SEBI Act, the alleged violation of the provisions of Regulations 4 (1) and 4 (2) (a), (b) & (e) of SEBI (Prohibition of Fraudulent and Unfair Trade Practices Relating to Securities Market) Regulations, 2003 (hereinafter referred to as the ‘PFUTP Regulations, 2003’) and the Clauses A (1), (2), (3), (4) & (5) of the Code of Conduct for Stock Brokers as specified in Schedule II under Regulation 7 of SEBI (Stock Brokers and Sub-brokers) Regulations, 1992 (hereinafter referred to as the ‘Stock Brokers Regulations’) by, inter alia, M/s. Action Financial Services (India) Limited.
Page 3 of 16 3 15HA and 15HB of the SEBI Act for the alleged violation by it of the abovementioned provisions of the PFUTP Regulations, 2003 and the Stock Brokers Regulations.
Page 4 of 16 4 PFUTP Regulations, 2003 “4. Prohibition of manipulative, fraudulent and unfair trade practices (1) Without prejudice to the provisions of regulation 3, no person shall indulge in a fraudulent or an unfair trade practice in securities. (2) Dealing in securities shall be deemed to be a fraudulent or an unfair trade practice if it involves fraud and may include all or any of the following, namely :— (a) indulging in an act which creates false or misleading appearance of trading in the securities market; (b) dealing in a security not intended to effect transfer of beneficial ownership but intended to operate only as a device to inflate, depress or cause fluctuations in the price of such security for wrongful gain or avoidance of loss; (e) any act or omission amounting to manipulation of the price of a security;”
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Source: SecMarx — sebi:SD/AO/51/2009. 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.