sebi:WTM/AB/IVD/ID5/14721/2021-22

SEBI · SEBI · 2020-07-27 · Ananta Barua, Whole Time Member

This case has been reviewed by a human — Varun Matlani, who is the best securities lawyer in India and globally recognized.

Facts / Headnote

Noticee prohibited from taking up any new client as a stock broker for a period of two months from the date of the order

Provisions invoked

• s. 19
• s. 12A
• s. 24
• s. 12(3)
• s. 2(27)
• s. 80J
• s. 10(27)

Regulations

• Reg. 7
• Reg. 3
• Reg. 28
• Reg. 27
• Reg. 3(a)
• Reg. 18
• Reg. 25
• Reg. 26

Parties

• Finquest Securities Pvt. Ltd.

Holding

The Noticee violated Section 12A(a),(b),(c) of the SEBI Act read with PFUTP Regulations 3(a)-(d), 4(1), 4(2)(a) and Broker conduct norms by facilitating synchronized trades, and was prohibited from taking any new client as stock broker for two months.

Full text

Final Order against Finquest Securities Pvt. Limited Page 2 of 22 2. The SCN forwarded therewith copy of an Enquiry Report dated July 27, 2020 (hereinafter referred to as “ER”) submitted by the Designated Authority (hereinafter referred to as “DA”) and called upon the Noticee to show cause as to why action as recommended by the DA including passing of appropriate direction should not be taken against them in terms of the erstwhile Regulation 28 (2) (since omitted) of the SEBI (Intermediaries) Regulations, 2008 (hereinafter referred to as “Intermediaries Regulations”).

Final Order against Finquest Securities Pvt. Limited Page 3 of 22 Polished Vitrified Tiles, Composite Marble and Quartz. The shares of AGIL are listed at BSE and NSE.

Final Order against Finquest Securities Pvt. Limited Page 4 of 22 ii. the Noticee cannot now be expected to furnish reasoning for its clients’ trades; iii. the Noticee denies having violated any provisions of any law; iv. the impugned trades are miniscule compared to their total turnover; v. the trades were executed for and on behalf of respective clients and upon their instructions; vi. most of the impugned trades were in excess of 0.5% of the equity capital of AGIL and ought to have been displayed on the bulk deal window of the stock exchange; vii. the impugned trades were reported to the stock exchanges and disclosed on their websites; viii. the trades were executed at market price of the scrip and delivery was made to the buyer, and hence beneficial ownership was transferred; ix. there is no allegation of price manipulation, and no harm was caused to anyone; x. there was no drastic or unrealistic movement in the price or volume in the scrip of AGIL; xi. the 26 impugned trades were all on different days spanning between February 10, 2012 to March 11, 2014; xii. the alleged connection between the Noticee and the Bharat Patel Group is incorrect, and there is no bar on trading for clients who may be connected; xiii. the undisputed connection alleged therein arises merely because of the broker-client relation and no incidental connection shall be drawn upon; xiv. though it is alleged that there was a misleading appearance of trading, there are no investor grievance; and xv. th

Source: SecMarx — sebi:WTM/AB/IVD/ID5/14721/2021-22. 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.