sebi:VSS/AO-88/2009
This case has been reviewed by a human — Varun Matlani, who is the best securities lawyer in India and globally recognized.
Facts / Headnote
Charges proved; penalty imposed
Provisions invoked
- s. 15
- s. 15H
- s. 15J
Regulations
- Reg. 4
- Reg. 3
- Reg. 2(1)(c)
- Reg. 4(1)
- Reg. 4(a)
- Reg. 7
- Reg. 4(2)(a)
- Reg. 4(2)(e)
- Reg. 4(2)(g)
- Reg. 4(2)(b)
- Reg. 4(2)(n)
Parties
- Sanchay Finvest Ltd.
Holding
Sanchay Finvest Ltd. violated regulations 4(1), 4(2)(a), (b), (e), (g) and (n) of the PFUTP Regulations and clauses A(1) to A(5) of the Code of Conduct for Stock Brokers by executing synchronized/reversal trades creating artificial volume in AEL, and was held liable for a total monetary penalty of Rs.50,000 under sections 15HA and 15HB of the SEBI Act.
Full text
Page 2 of 21 deals/reversal trading/fictitious trading in the shares of AEL in such a manner that led to creation of artificial volume and impacted the price of the scrip. The entities found to have been involved in the alleged manipulation and against whom adjudication proceedings were initiated are as under:-
Page 3 of 21 Brokers and Sub Brokers) Regulations (hereinafter referred to as “Brokers Regulations”), and therefore, liable for monetary penalty under sections 15HA and 15HB of Securities and Exchange Board of India Act, 1992 (hereinafter referred to as “SEBI Act”).
Page 4 of 21 a) It had traded in the scrip in the capacity of a broker on behalf of Tejas at the price, time and quantity indicated by the client. b) Tejas is not related in any manner to SFL or the promoters of SFL or its directors or even with any of its group entities. He is a person of means sufficient to carry out the transactions him self. c) The transactions were carried out transparently through the BOLT mechanism of the BSE where SFL could not have known who the counter parties were. d) The counterparty brokers are not known/connected to SFL. It had not carried out even a single trade in its proprietary account in the scrip. e) The average transaction involved amounts to less than Rs.1.12 crore of purchases and less than Rs.1.12 crore of sales. The total share capital of the company is Rs.22 crore and the market capitalization of the Company therefore, at a price of Rs.400/- per share, being the then ruling market price, is Rs.880 crore. It is impossible to envisage that transactions amounting to such a size and being 0.0014% of the market capitalization can even remotely affect the price. f) Total turnover of the Noticee was about Rs.561 crore and the total turnover of these transactions was about Rs.2.25 crore both buy and sell thus amounting to about 0.004% of the total transactions of the Noticee. g) AEL is a large and growing company and the transactions were done at market prices and well within the upper/lower limits set by the rules of the exchange. h) SFL ha
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Source: SecMarx — sebi:VSS/AO-88/2009. 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.