sebi:WTM/GM/ISD/15/2017
This case has been reviewed by a human — Varun Matlani, who is the best securities lawyer in India and globally recognized.
Facts / Headnote
Interim order prohibiting Gautam Sanjay Khandelwal from buying, selling or dealing in securities and directing him to cease and desist from disseminating news or messages related to the securities market, pending investigation.
Provisions invoked
- s. 19
- s. 12(1)
- s. 12A
Regulations
- Reg. 3
- Reg. 2(1)(c)
- Reg. 4(2)
- Reg. 2
- Reg. 3(1)
- Reg. 2(u)
Parties
- Gautam Sanjay Khandelwal
Holding
The Whole Time Member prima facie held that Gautam Sanjay Khandelwal violated Section 12(1) of the SEBI Act, 1992 read with Regulation 3(1) of the SEBI (Research Analysts) Regulations, 2014 by acting as an unregistered research analyst, and prima facie contravened the PFUTP Regulations and Section 12A of the SEBI Act by disseminating misleading SMS buy recommendations while trading contrary to those recommendations. Interim prohibitory directions were issued pending investigation.
Full text
Page 2 of 16 From the above, it is seen that the revenue of STML has been declining and profit margins (OPM and NPM) are worsening over the years. Annual Report FY 2014-15 of STML states that “Company's accumulated losses have exceeded its entire net worth as on 31.03.2015 and has become Sick Industrial Company in accordance with the provisions of Sick Industrial Companies (Special Provisions) Act, 1985”. The website of the Board for Industrial and Financial Reconstruction (BIFR) also states the status of the company as "Pending Determination of Sickness".
Page 3 of 16 SMS Aggregator and onwards to the telecom service provider before it is sent to various cell phone numbers, as per the request of the sender.
Page 4 of 16 Rise of average daily volume of shares of STML vis-à-vis Pre-SMS period 403% 248% It is observed that trade volume in the scrip of STML rose significantly during 'the SMS period' as compared to the 'Pre-SMS period' (rise in volume is 4.03 times). Comparatively, volumes fell in the 'Post SMS period'. A similar effect is observed in the prices of the scrip as seen in Chart 3.
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Source: SecMarx — sebi:WTM/GM/ISD/15/2017. 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.