sebi:WTM/AN/IVD/ID8/29988/2023-24
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Facts / Headnote
Noticees found to have violated section 12A(a), (b), (c) of the SEBI Act and regulations 3(a), 3(b), 3(c), 3(d), 4(1) and 4(2)(q) read with regulation 2(1)(c) of PFUTP Regulations; restrained from accessing securities market for 3 years from date of payment of disgorgement; penalties imposed under section 15HA; disgorgement directed.
Provisions invoked
- s. 11B
- s. 19
- s. 12A
- s. 11
- s. 15H
- s. 15J
- s. 15F
Regulations
- Reg. 3
- Reg. 2(1)(c)
- Reg. 3(a)
- Reg. 4(2)(q)
Parties
- R Senthil Kumar (Noticee 1)
- Geetha N (Noticee 2)
- Prakash V (Noticee 3)
- Geetha V (Noticee 4)
Holding
The Noticees front ran the trades of Trustline (the Big Client) by placing orders in their own trading accounts while in possession of non-public information about impending orders of Trustline, thereby violating section 12A(a), (b), (c) of the SEBI Act and regulations 3(a), 3(b), 3(c), 3(d), 4(1) and 4(2)(q) read with regulation 2(1)(c) of the PFUTP Regulations. Penalties of Rs. 10,00,000 each were imposed on Noticees 1 and 3, and Rs. 5,00,000 each on Noticees 2 and 4, along with disgorgement and a 3-year market ban.
Full text
Final order in the matter of Trustline Holdings Pvt. Ltd. – PMS and Page 2 of 52 Trustline Deep Alpha – AIF 2. SEBI conducted an investigation for the period from May 01, 2017 to June 30, 2022 (“Investigation Period” / “IP”), to ascertain whether certain entities have front run the trades of Big Client and have violated the provisions of the Securities and Exchange Board of India Act, 1992 (“SEBI Act”) and regulations framed thereunder including SEBI (Prohibition of Fraudulent and Unfair Trade Practices Relating to Securities Market) Regulations, 2003 (“PFUTP Regulations”).
Final order in the matter of Trustline Holdings Pvt. Ltd. – PMS and Page 3 of 52 Trustline Deep Alpha – AIF well as through Kotak Securities Limited (“Kotak”). ODIN server reports (trade file) submitted by Trustline for the period from March 30, 2017 to October 14, 2022 provides that during the Investigation Period, amongst others, the orders for Trustline were punched from ODIN user ID 29502 (ODIN is a software provided by the brokers for placing orders). Vide email dated October 18, 2022, Trustline has further submitted that Noticee 1 was placing orders for Trustline from the ODIN software through the above noted user ID 29502 during the period from July 28, 2017 to September 23, 2022. Kotak vide emails dated September 14 and 21, 2022 has confirmed that amongst others, Mr. R Senthil Kumar (Noticee 1) and Mr. Prakash V (Noticee 3) were placing orders for Trustline during the period from May 01, 2017 to June 30, 2022.
Final order in the matter of Trustline Holdings Pvt. Ltd. – PMS and Page 4 of 52 Trustline Deep Alpha – AIF amount of Rs 10,89,909 was transferred from bank account of Noticee 3 to bank accounts of Noticee 1.
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Source: SecMarx — sebi:WTM/AN/IVD/ID8/29988/2023-24. 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.