sebi:WTM/GA/160/ERO/3/07

SEBI · SEBI · 2002-02-28 · G. Anantharaman, Whole Time Member

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Facts / Headnote

Violation found; certificate of registration suspended for nine months

Provisions invoked

• s. 19

Regulations

• Reg. 7
• Reg. 4
• Reg. 13(4)
• Reg. 5(1)
• Reg. 13
• Reg. 3
• Reg. 4(a)
• Reg. 199

Parties

• Shri Ballabh Dass Daga

Holding

The Broker violated Regulations 4(a) and (b) of the FUTP Regulations and clauses A(1), (2) and (4) of the Code of Conduct under the Broker Regulations in dealing in Patriot Trading Company Limited and Globe Stocks & Securities Limited. A major penalty of suspension of certificate of registration INB030492218 for nine months was imposed.

Full text

Page 2 of 44 1.2 In view of the aforesaid unusual price movement noticed in the shares of PTCL, Securities and Exchange Board of India (hereinafter referred to as SEBI) conducted an investigation in respect of buying, selling and dealing in the shares of PTCL and to enquire into whether PTCL, other intermediaries/persons associated with the buying, selling and dealing in the shares of PTCL contravened the provisions of Securities and Exchange Board of India (Prohibition of Fraudulent and Unfair Trade Practices Relating to Securities Market) Regulations, 1995 (hereinafter referred to as the FUTP Regulations), Securities and Exchange Board of India (Stock Brokers and Sub-Brokers) Regulations, 1992 (hereinafter referred to as the Broker Regulations), Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations,1997, (hereinafter referred to as the ‘Takeover Regulations’), Securities and Exchange Board of India( Prohibition of Insider Trading) Regulations 1992. 1.3 The investigation conducted by SEBI found that certain members of CSE namely, Shri Ballabh Dass Daga, Bubna Stock Broking Services Ltd., D.B & Co, Lexus Shares & Stock Brokers Pvt. Ltd. and Prakash Baid Securities Pvt. Ltd. traded substantially in the shares of PTCL and contributed 87% of the total turnover in the said shares at CSE during the period August 2001 to February 2002. The aforesaid members of CSE are also registered as stock brokers with SEBI. Shri Ballabh Dass Daga i

Page 3 of 44 in the shares of PTCL. It was also found that both the buy and sell orders were executed by the Broker in his single terminal at the same time with the same price and quantity with most of the trades being client to client transactions. The price of the shares of PTCL reached Rs.27 on February 28, 2002. It has been observed that most of his transactions were in the nature of matching and synchronized trades where both sell and buy order of identical quantity and price were entered in his own terminal. It has been observed that the most of the trades were client to client trades executed on the single terminal of the Broker. 1.5 The trades executed by the broker in the shares of PTCL at CSE are given below; DATE SELL QTY SELL RATE (Rs) SELL VALUE (Rs) BUY QTY BUY RATE (Rs) BUY VALUE (Rs) 07-Aug-01 60800 2.00 121600.00 60800 2.00 121600.00 08-Aug-01 234000 2.00 468000.00 234000 2.00 468000.00 16-Aug-01 52200 2.00 104400.00 52200 2.00 104400.00 06-Sep-01 46000 2.12 97500.00 46000 2.12 97500.00 10-Sep-01 25000 2.20 55000.00 25000 2.20 55000.00 11-Sep-01 45000 2.29 103000.00 45000 2.29 103000.00 12-Sep-01 35000 2.20 77000.00 35000 2.20 77000.00 17-Sep-01 31400 2.32 72720.00 31400 2.32 72720.00 18-Sep-01 72900 2.22 161590.00 72900 2.22 161590.00 19-Sep-01 54000 2.20 118800.00 54000 2.20 118800.00 24-Sep-01 10000 2.20 22000.00 10000 2.20 22000.00 27-Sep-01 14000 2.30 32200.00 14000 2.30 32200.00 08-Oct-01

Page 4 of 44 DATE SELL QTY SELL RATE (Rs) SELL VALUE (Rs) BUY QTY BUY RATE (Rs) BUY VALUE (Rs) 11-Oct-01 75000 2.08 156000.00 75000 2.08 156000.00 15-Oct-01 500 2.85 1425.00

Source: SecMarx — sebi:WTM/GA/160/ERO/3/07. 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.