sebi:WTM/GA/102/ISD/11/06

SEBI · SEBI · 2003-05-28 · G. Anantharaman, 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

Minor penalty of censure imposed on certificate of registration

Provisions invoked

• s. 12

Regulations

• Reg. 7
• Reg. 13(4)
• Reg. 5(1)
• Reg. 13(2)
• Reg. 3
• Reg. 17(1)
• Reg. 17(1)(i)

Parties

• M/s Uday Stocks & Securities Private Limited

Holding

The Whole Time Member imposed a minor penalty of censure on M/s Uday Stocks & Securities Private Limited for failure to assess clients' financial capacity, violation of Regulation 17(1)(i) for non-maintenance of contract-note counterfoils, and failure to deliver shares within the stipulated time under SEBI Circular dated November 18, 1993.

Full text

Home » Enforcement » Orders » Orders of Chairman/Members Enforcement Enforcement▼ ORDER AGAINST M/S UDAY STOCKS & SECURITIES PRIVATE LIMITED MEMBER, BANGALORE STOCK EXCHANGE LTD., UNDER REGULATION 13(4) OF SECURITIES AND EXCHANGE BOARD OF INDIA (PROCEDURE FOR HOLDING ENQUIRY BY ENQUIRY OFFICER AND IMPOSING PENALTY) REGULATIONS, 2002 FOR THE IRREGULAR TRANSACTIONS IN THE SHARES OF HOME TRADE LTD.

REGULATIONS, 2002 FOR THE IRREGULAR TRANSACTIONS IN THE SHARES OF HOME TRADE LTD. WTM/GA/102/ISD/11/06 1.0 BACKGROUND 1.1 M/s Uday Stocks & Securities Private Limited (hereinafter referred to as the Broker) is a member of the Bangalore Stock Exchange Ltd. (hereinafter referred to as BgSE) and is registered with the Securities and Exchange Board of India (hereinafter referred to as SEBI) as a stock broker under section 12 of Securities and Exchange Board of India Act, 1992 (hereinafter referred to as the said Act) with registration number INB 081033837. 1.2 The shares of Home Trade Ltd. (hereinafter referred to as HTL) were listed at Pune Stock Exchange Ltd. ( hereinafter referred to as PSE) on November 15, 1999 at Rs 250/- and at BgSE on November 16, 1999 at Rs.275/-. There was a very sharp rise in the price of the shares of HTL both at PSE and BgSE and it reached Rs. 315/ - within two weeks of its listing, i.e. by December 06, 1999. Thereafter, the price of the said shares reached Rs.874/- on May 05, 2000. The maximum rise in the price of the shares of HTL took place between November 16, 1999 and March 31, 2000, when it moved from Rs.275/- to Rs.815/-. 1.3 SEBI conducted an investigation into the buying, selling and dealings in the shares of HTL inter alia by the members of BgSE including the Broker for the alleged circular trading and price manipulation thereby contravening the provisions of Securities and Exchange Board of India (Prohibition of Fraudulent and Unfair Trade

1.4 The investigation conducted by SEBI found that the Broker had traded in the shares of HTL on behalf of his clients, Ms Priyadarshini Bhati and Ms Chandra Bai. It was also alleged that the Broker had traded on his own account in the shares of HTL at BgSE. The transaction details of the Broker in the shares of HTL are mentioned below: Period Gross Purchase (shares) % to the total buy volume at BgSE Gross Sales (shares) % to the total sell volume at BgSE April 01, 2000 to March 31, 2001 30,500 4.11% 31,400 4.17% 1.5 The client /proprietary wise trade details made by the Broker in the shares of HTL are as under : Name Buy quantity Sell quantity Ms. Priyadarshini Bhati 27,500 28,400 Ms. Chandra Bai 1500 1500 Trading a/c 1500 1500 1.6 The investigation conducted by SEBI inter alia revealed that the Broker had resorted to circular trading with other members of BgSE, wherein the shares of HTL were traded amongst themselves, creating artificial volumes in the shares of HTL. 2.0 APPOINTMENT OF ENQUIRY OFFICER

Source: SecMarx — sebi:WTM/GA/102/ISD/11/06. 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.