sebi:VSS/AO-132/2009
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Facts / Headnote
Charges proved; penalty imposed on Noticee
Provisions invoked
- s. 15
- s. 15H
- s. 15J
Regulations
- Reg. 7
- Reg. 4
- Reg. 3
- Reg. 4(1)
- Reg. 4(a)
- Reg. 4(2)(a)
- Reg. 4(2)(e)
- Reg. 4(2)(g)
- Reg. 4(2)(b)
- Reg. 4(2)(n)
Parties
- M/s Chintamani Shares and Broking Limited
Holding
The Noticee, M/s Chintamani Shares and Broking Limited, was held to have violated regulations 4(1), 4(2)(a), (b), (e), (g) and (n) of the PFUTP Regulations and clauses A(1)-(5) of the Code of Conduct for Stock Brokers by executing synchronized, circular and reversal trades in BSEL and MSL scrips that created artificial volume and manipulated prices. A total penalty of Rs. 2,00,000 was imposed (Rs. 1,50,000 under section 15HA and Rs. 50,000 under section 15HB of the SEBI Act).
Full text
Page 2 of 28 2. The role of the brokers, sub-brokers and their clients who had traded in the scrips was scrutinized. It was observed during the investigation that certain entities had indulged in synchronization of deals/reversal trading/fictitious trading in such a manner that led to creation of artificial volume and impacted the price of the scrips. Hence, it was alleged that one of the brokers, namely, M/s Chintamani Shares and Broking Limited (hereinafter referred to as ‘Noticee/Chintamani’), who had traded on behalf of one of its Directors, namely Mr. Pratik Rameshchandra Shah (hereinafter referred to as ‘Pratik’), in the scrips of BSEL and MSL in NSE, created artificial volumes which led to manipulation in the price and consequently, violated the provisions of regulations 4(1), 4 (2) (a), (b), (e), (g) and (n) of SEBI (Prohibition of Fraudulent and Unfair Trade Practices Relating to Securities Markets) Regulations, 2003 (hereinafter referred to as “PFUTP”) and clauses A (1), (2), (3), (4) and (5) of 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 “Brokers Regulations”).
Page 3 of 28 to inquire into and adjudge the alleged violations of provisions of PFUTP and Brokers Regulations. SHOW CAUSE NOTICE, HEARING AND REPLY
Page 4 of 28 b) Does the violation, if any, on the part of the Noticee attract monetary penalty under sections 15 HA and 15 HB of SEBI Act? c) If so, what would be the monetary penalty that can be imposed taking into consideration the factors mentioned in section 15J of SEBI Act?
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Source: SecMarx — sebi:VSS/AO-132/2009. 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.