sebi:WTM/KMA/ERO/289/08/2010
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Facts / Headnote
Warning issued to the stock broker; enquiry proceeding disposed of without penalty
Provisions invoked
- s. 19
Regulations
- Reg. 28(2)
- Reg. 4(2)(a)
Parties
- M/s. Ashok Kumar Kayan
Holding
The stock broker, M/s. Ashok Kumar Kayan, was found to have violated Regulation 4(2)(a),(e) and (o) of the PFUTP Regulations and Clauses A(1) to A(4) and B(4)(a) of the Code of Conduct under Schedule II of the Stock Brokers Regulations through synchronised/matched trades, but was only warned rather than penalised as recommended by the Enquiry Officer.
Full text
Page 2 of 10 Securities and Exchange Board of India (Stock Brokers and Sub-brokers) Regulations, 1992 (hereinafter referred to as the Stock Brokers Regulations). The Enquiry Officer in his Report dated May 29, 2008 found that the stock broker had contravened the aforesaid statutory provisions and recommended that the certificate of registration of the stock broker be suspended for a period of four months. Thereafter, a notice dated June 11, 2008 enclosing therewith a copy of the Enquiry Report, was issued to the stock broker calling upon it to show cause as to why action should not be taken as recommended by the Enquiry Officer or as
Page 3 of 10 1, 2005 which went up to Rs.298.50/- as on August 23, 2005. The company was found to have low market capitalisation and its lacklustre financial performance could not have supported the said price rise in a short period of time. The aforesaid events led to the initiation of investigations into the dealing in the shares of the company for the period between April 1, 2005 and August 23, 2005 (the investigation period). SEBI had also passed an ad- interim ex-parte order dated September 29, 2005 in the matter and directed various entities/stock brokers including M/s M. Bhiwaniwala & Co and M/s Shyam Lal Sultania, not to buy, sell or deal in securities, in any manner, either directly or indirectly, till further directions. The said order was confirmed (as against the stock brokers), by SEBI, vide order dated January 12, 2006, as stated therein, after affording an opportunity of hearing. The enquiry proceeding initiated against M/s Shyam Lal Sultania and M/s M. Bhiwaniwala & Co were disposed of by SEBI, vide orders dated January 9, 2009 and July 7, 2009, respectively. The findings of the investigation in the matter revealed that a total of 37,34,498 shares were traded on both the buy and sell sides at CSE during the relevant period. It was found that the stock broker had executed trades in respect of 2,20,900 shares (buy and sell). The stock broker had bought and sold 81,200 and 1,39,700 shares respectively, of the company and the same constituted 5.91% of the total nu
Page 4 of 10 brokers for 1,17,700 shares constituting 53.27%. The investigations revealed that the stock broker was trading for Raghu Padma Trust, Srijan Vyapar Private Limited and Swarn Ganga Trading Private Limited, who were its major clients. It was also found that during the period when the stock broker was actively trading, the share price of the company had moved up from Rs.102.30/- to Rs.298.40/-.
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Source: SecMarx — sebi:WTM/KMA/ERO/289/08/2010. 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.