sebi:WTM/GA/81/ISD/08/06

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 suspension of certificate of registration for a period of fifteen days imposed

Provisions invoked

• s. 12

Regulations

• Reg. 7
• Reg. 13(4)
• Reg. 5(1)
• Reg. 13(2)
• Reg. 3
• Reg. 199
• Reg. 17(1)
• Reg. 2
• Reg. 13(1)(a)
• Reg. 17(1)(i)
• Reg. 4(a)(b)(c)

Parties

• M/s P L Pushpalakshmi Credit & Capital Pvt. Ltd., Member, Pune Stock Exchange Ltd., SEBI Registration No. INB111094331

Holding

The Whole Time Member imposed a minor penalty of suspension of the certificate of registration of P L Pushpalakshmi Credit & Capital Pvt. Ltd. (INB111094331) for fifteen days for violation of Regulation 17(1)(i) and Clauses A(1), A(2) and A(5) of the Code of Conduct under the Broker Regulations.

Full text

Home » Enforcement » Orders » Orders of Chairman/Members Enforcement Enforcement▼ ORDER AGAINST M/s P L PUSHPALAKSHMI CREDIT & CAPITAL PVT. LTD., MEMBER, PUNE STOCK EXCHANGE LTD., SEBI REGISTRATION NO. INB111094331 UNDER REGULATION 13(4) SEBI (PROCEDURE FOR HOLDING ENQUIRY BY ENQUIRY OFFICER AND IMPOSING PENALTY) REGULATIONS, 2002 FOR THE IRREGULAR TRANSACTIONS IN THE SCRIP OF HOME TRADE LTD. WTM/GA/81/ISD/08/06

Enquiry Officer. In view of the above, the proceedings were conducted ex- parte by the Enquiry Officer and after examining the documents/materials available on record, the Officer submitted his report on November 19, 2004 and recommended for the imposition of a minor penalty of suspension of certificate of registration granted by SEBI to the for a period of fifteen days, in terms of 2002 Regulations. 2.4 The Enquiry Officer in the said Report has observed that the Broker did not act in good faith and without negligence and also did not exercise due diligence and care when he tr his client in the scrip of HTL who was unknown to him. The Enquiry Officer has also observed that the Broker has failed to submit the acknowledgments of the clien counterfoils of the contract notes, at least in a single instance although he had traded for over 13,000 shares of HTL, which is in violation of regulation 17(1)(i) of the Regulations. 3.0 CONSIDERATION OF ISSUES AND FINDINGS 3.1 Based upon recommendation of the Enquiry Officer, a show cause notice dated November 25, 2004 was issued to the Broker under regulation 13(2) of the 2002 Regulation him to show cause as to why the penalty as considered appropriate should not be imposed upon him. A copy of the Enquiry Report was also forwarded to the Broker with show cause notice. The said notice was served on the Broker through PSE. However, the Broker has failed to submit any reply to the said show cause notice till date. 3.2 As the Enquiry Officer

3.10         In terms of the provisions of the Broker Regulations, a stock broker, without any delay shall issue the contract note to his client and in terms of regulation 17(1) (i) of the Regulations, he has to maintain the counterfoils or duplicates of such contract notes. 3.11      In the present matter, the Broker had failed to submit even a single copy of acknowledgment of counterfoils of contract notes. It can be seen from the trading details, that the had executed several transactions of significant volume in the scrip of HTL on behalf his client, without any specific authorization. Despite of executing large transactions, the had failed to obtain the acknowledgement copy of contract notes of even a single transactions. It does not appear to be a simple omission and gains significance in the back of the  allegations that the orders were placed by a third party (Shri Veerkar, employee of HTL). 3.12         In view of the above, as the Broker has failed to obtain the acknowledgement of his client on the counterfoil of the contract notes, as required under regulation 17(1)(i) of the Regulations, it is established that the Broker has acted in contravention of the regulation 17(1)(i) of the Broker Regulations. 3.13         Considering that the Broker had traded in huge volumes at PSE for unknown client without his specific authorization, has failed to verify the financial worth of the said clien commencing trading exclusively in the scrip of HTL on his behalf,  placing orde

Source: SecMarx — sebi:WTM/GA/81/ISD/08/06. 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.