sebi:SP/AO-15/2011
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Facts / Headnote
Allegations of violation of Regulations 3(b) and 4(2)(a) of PFUTP Regulations and Clauses A(1) and A(2) of Code of Conduct for Stock Brokers established against PDKSS and APMFC; allegation of price manipulation through first trades not established against PDKSS, DPKSS and SI; penalty quantum to be determined under sections 15HA and 15HB
Provisions invoked
- s. 15
- s. 15H
- s. 15I
- s. 15J
Regulations
- Reg. 7
- Reg. 4
- Reg. 3
- Reg. 15
- Reg. 4(a)
- Reg. 2
- Reg. 3(b)
- Reg. 4(2)(a)
Parties
- Pee Dee Kapur Stocks and Securities Ltd. (PDKSS)
- DPK Stock and Securities (DPKSS)
- APM Financial Consultants Pvt. Ltd. (APMFC)
- Shivam Investments (SI)
Holding
The Adjudicating Officer held that PDKSS (broker) and APMFC (sub-broker) violated Regulations 3(b) and 4(2)(a) of the PFUTP Regulations and Clauses A(1) and A(2) of the Code of Conduct for Stock Brokers by engaging in self and cross deals that created artificial volumes in the scrip of RKL, and also violated the SEBI circular on multiple client codes. However, the allegation of price manipulation through first trades at higher LTP was not established against PDKSS, DPKSS and SI due to meager quantities traded.
Full text
2 period‟). It was observed that during the investigation period, RKL made certain corporate announcements which were false / misleading as a result of which a price rise was observed during the patch period from July 21, 2006 to August 22, 2006 wherein the price increased from Rs.127 to Rs.160.
3 6. Further it is alleged that shares were purchased at a higher price daily in the first trades when the same were available at a lower price during the day. It was also alleged that PDKSS, through the first self trades, had attempted to increase the price of shares during the price fall period – July 3 to July 31, 2006 i.e. that the trading pattern was an attempt to support the falling prices of the scrip through these first trades. It was alleged that high LTP variation first trades carried out for related entities /clients were done to prop up the falling share price of RKL when the company was considering issuance of preference shares to FIIs at Rs.159.5.
4 11. I was appointed as Adjudicating Officer vide order dated May 25, 2009 under section 15I of the SEBI Act read with rule 4 of SEBI (Procedure for Holding Inquiry and Imposing
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Source: SecMarx — sebi:SP/AO-15/2011. 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.