sebi:VSS/AO-75/2009
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Facts / Headnote
Charges proved; penalty of Rs. 8,00,000 imposed under section 15HA of SEBI Act
Provisions invoked
- s. 15
- s. 15H
- s. 15J
Regulations
- Reg. 4
- Reg. 4(a)
- Reg. 2
- Reg. 4(2)(a)
- Reg. 4(2)(g)
- Reg. 4(2)(b)
Parties
- Sunil Giridharilal Raheja
Holding
The Adjudicating Officer held that the Noticee violated regulations 4(2)(a), (b) and (g) of the PFUTP Regulations by indulging in self trades and synchronized trades across 12 scrips, creating artificial volumes and a false or misleading appearance of trading, and imposed a penalty of Rs. 8,00,000 under section 15HA of the SEBI Act.
Full text
Page 2 of 22 h) Rainbow Foundations Ltd. i) GV Films Ltd. j) Yogi Sung-Won India Ltd. k) Kaashyap Radiant Systems Ltd. l) International Hometex Ltd.
Page 3 of 22 SHOW CAUSE NOTICE, HEARING AND REPLY 5. Show Cause Notice No. EAD-5/VSS/RS/152410/2009 dated January 30, 2009 (hereinafter referred to as “SCN”) was issued to the Noticee under rule 4(1) of the Rules to show cause as to why an inquiry should not be held against the Noticee and penalty be not imposed on the Noticee under section 15HA of SEBI Act for the alleged violation specified in the said SCN.
Page 4 of 22 ¾ A synchronized trade is a transaction wherein the buy and sell order quantities are identical, and are put through at exactly the same time on the trading platform. One of the guiding principles in proving synchronized trading, as per the SEBI Regulations, is the exactness of the price and quantity of the 'buy' and 'sell' orders and the closeness in time at which they are placed. ¾ The Securities Appellate Tribunal had clarified that synchronized trading is per se not illegal unless the intent to manipulate the price by creating an artificial market is proven. ¾ For the market manipulation stated in Regulation 4 (of FUTP Regulations) if one is to be charged it is absolutely necessary to prove that the person had acted intentionally," SAT had said in the Nirmal Bang case. ¾ In the Videocon case, the Tribunal examined the extent of evidence required to establish the charge of market manipulation and observed: "... in the absence of reasonably good evidence to support, charge of market manipulation, which is a very serious one, cannot stick on the Appellant company, merely on surmises and conjectures." ¾ I wish to state that none of the transactions done by me falls neither in Synchronized trading nor Circular trading, as it has failed to fulfil the entire criteria as defined by the applicable Acts in force from time to time. ¾ Trading Mantra: High Volume Low Margin is the concept of my trading. I do trade regularly for my living. Whatever trade done, I had no int
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Source: SecMarx — sebi:VSS/AO-75/2009. 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.