sebi:WTM/GA/45/IVD/1/06

SEBI · SEBI · 2006-01-17 · 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

Ad interim ex-parte direction to cease and desist, effective immediately, subject to objections and personal hearing if sought within 15 days, failing which to take final effect.

Provisions invoked

• s. 19
• s. 11D

Regulations

• Reg. 7
• Reg. 199
• Reg. 15
• Reg. 4(2)
• Reg. 4(2)(f)

Parties

• Mathew Easow
• Mathew Easow Fiscal Services Limited
• M/s Mathew Easow Financial Services

Holding

Mathew Easow was directed to cease and desist from giving investment recommendations in public media in violation of Regulation 4(2)(f), and his associated broker and sub-broker were directed to cease and desist from violating Clause B(7A) of their Codes of Conduct.

Full text

Home » Enforcement » Orders » Orders of Chairman/Members Enforcement Enforcement▼ 1.                  Background  WTM/GA/45/IVD/1/06 1.1 It has been noticed that representatives of some of the regulated entities such as brokers, merchant bankers, asset management companies are offering investment ad regarding purchase and sales of shares/securities through media. These advices are general in nature and addressed to the entire investor community at large. Many time advices and recommendations are given with an air of seeming pedantry without specific disclaimers or disclosing stock specific positions taken by such persons. Inv decisions of lay investors may be influenced by these recommendations. In order to bring to the notice of the public the subsistence of vested interest of such entitie recommendations given by these entities and the investment portfolios held by them or by the regulated entities they represent, SEBI has prescribed certain disclosure requi for the intermediaries through the regulations. The regulations require that the intermediaries or their employees shall not render directly or indirectly any investment advic any security in the publicly accessible media, whether real time or non-real-time, unless a disclosure of his long or short position in the said security has been made,  while re such advice. SEBI has also issued letters to the Television media in this regard. 1.2 Since, the recommendations made to the public do impact the investment decisions of

Period Scrip Exch. Entity Recommendation given Trading by Mathew Buy Qty Sell Qty M/s Mathew Easow Research Securities Ltd.

3. Conclusion 3.1 I see from the above analysis a clear and definite pattern in the trading by Mathew Easow in certain shares and his investment recommendations in those shares. While Mathew has been advising the market to buy a stock, he himself has taken contrary positions. This indicates an obvious attempt to mislead the investors through inv recommendations, in a striking posture of ambivalence coupled with interest. 3.2 It is apparent that Mathew Easow is purveying information to the public which he himself does not appear to believe to be true. The only possible ulterior motive for Mathew E employ such an artifice appears to be to make unfair gain for himself at the cost of lay investors. The act of Mathew Easow and his associate entities thus is in vio Regulation 4(2) (f) of SEBI (Prohibition of Fraudulent and Unfair Trade Practices Relating to Securities Market) Regulations, 2003, which reads as follows: “Dealing in securities shall be deemed to be a fraudulent or an unfair trade practice if it involves fraud and may include all or any of the following, namely… publishing or to publish or reporting or causing to report by a person dealing in securities, any information which is not true or which he does not believe to be true prior to or in the co dealing in securities.” 3.3 While making investment recommendations on securities in the said website, Mathew Easow has not disclosed his interest or the interest of his family members in the securities of the fact that the

Source: SecMarx — sebi:WTM/GA/45/IVD/1/06. 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.