sebi:VSS/AO-44/2009
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Facts / Headnote
Alleged violations of PFUTP Regulations and Brokers Regulations not established; matter disposed of
Provisions invoked
- s. 15
- s. 15J
Regulations
- Reg. 7
- Reg. 4
- Reg. 3
- Reg. 4(1)
Parties
- Mansukh Securities & Finance Ltd.
Holding
The alleged violation of the provisions of PFUTP Regulations and Brokers Regulations by the Noticee (Mansukh Securities & Finance Ltd.) as specified in the SCN does not stand established, and the matter is disposed of accordingly.
Full text
Page 2 of 13 of these scrips in such a manner that led to creation of artificial volumes and impacted the price of these scrips. The entities found to have been involved in the alleged manipulation and against whom action was initiated are as under:-
Page 3 of 13 4(2)(n) of SEBI (Prohibition of Fraudulent and Unfair Trade Practices Relating to Securities Markets) Regulations, 2003 (hereinafter referred to as “PFUTP Regulations”) and clauses A(1), A(2), A(3), A(4) and A(5) of Code of Conduct for Stock Brokers as specified in Schedule II read with regulation 7 of SEBI (Stock Brokers and Sub Brokers) Regulations (hereinafter referred to as “Brokers Regulations”), and therefore, liable for monetary penalty under sections 15HA and 15 HB of Securities and Exchange Board of India Act, 1992 (hereinafter referred to as “SEBI Act”).
Page 4 of 13 7. The Noticee vide letter dated August 1, 2008 replied to the SCN stating, inter alia, the following : a. The trades done by it in the scrip of Aarti and Havells during the period under investigation were in the normal course of business and as per the instruction of the client (Mr. Narender Nath) and on his behalf. b. It has denied that it had entered into any circular, synchronized and reversal trades with any other broker or client and further submitted that it is erroneous to allege that it had synchronized its trades with counterparty broker merely because its orders matched with the orders of the said counterparty broker. c. It has also submitted that the trading system of NSE, i.e. NEAT, is an automated and anonymous trading platform and a stock broker placing orders on it cannot be aware of the counterparty broker or client. It has relied upon the judgment of Hon’ble Securities Appellate Tribunal in the matter of Jayantilal Khandwala vs. SEBI. d. There is no evidence to show that Mansukh or its clients had knowledge of the orders placed by the counterparty broker or time, rate and other details thereof. e. It has been submitted that in the absence of such knowledge, the inference that its trading was in the nature of synchronized deals is only a conjecture and surmise and the same cannot be the basis to arrive at grave findings against it so as to penalize it. In this regard the Noticee has drawn attention towards the Order of Hon’ble Securities Appellat
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Source: SecMarx — sebi:VSS/AO-44/2009. 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.