sebi:WTM/KMA/ERO/IVD/370/03/2011
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Facts / Headnote
Certificate of registration suspended for a period of one month with effect from expiry of twenty one days from the date of the Order
Provisions invoked
- s. 19
Regulations
- Reg. 28(2)
- Reg. 4(2)(a)
Parties
- M/s Shyamlal Sultania [Registration No. INB 030700513]
Holding
The Broker participated in manipulation of the shares of G. R. Industries and Finance Limited in contravention of Regulations 4(2)(a), (e) and (o) of the PFUTP Regulations and Clauses A(1) to (4) and B(4) of the Broker Code of Conduct, and its certificate of registration as Member, The Calcutta Stock Exchange Limited, was suspended for one month.
Full text
Page 2 of 7 as the Broker Regulations). Thereafter, SEBI, vide order dated January 30, 2008 read with a subsequent order dated December 10, 2008 appointed a Designated Authority (hereinafter referred to as the Enquiry Officer) under the provisions of Securities and Exchange Board of India (Procedure for Holding Enquiry by Enquiry Officer and Imposing Penalty) Regulations, 2002 (since repealed) and Securities and Exchange Board of India (Intermediaries) Regulations, 2008 (hereinafter referred to as the Intermediaries Regulations) to enquire into the alleged violations committed by the Broker. The Enquiry Officer, in his report dated July 22, 2010 observed that the Broker had contravened the aforesaid provisions and recommended the suspension of its certificate of registration for a period of three months. Subsequently, a notice dated July 27, 2010 was issued to the Broker, requiring it to show cause as to why the penalty as recommended by the Enquiry Officer or as considered appropriate by SEBI should not be imposed against it. A copy of the Enquiry Report was also enclosed with the show cause notice. The Broker was also advised to inform SEBI, whether it would like to avail an opportunity of hearing. The Broker, vide reply dated July 28, 2010 stated:
Page 3 of 7 3. I have considered the Enquiry Report, the oral and written submissions made on behalf of the Broker and other material available on record. The Enquiry Officer found that the Broker was guilty of contravening Regulations 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 specified for stock brokers under Schedule II of the Broker Regulations. Detailed
Page 4 of 7 transferred the same to its clients, the details of which were mentioned in the Enquiry Report. 4. It was also observed that the trades of the Broker were also instrumental in increasing the share price of the Company from `3.05 to `22.10 (i.e. an increase of 724%). The trades of the Broker accounted for 21,80,400 shares out of the total traded volume of 61,07,700 shares. Subsequent to the said price increase, the Broker had again started executing the trades on January 5, 2005 when the share price was quoting at `169.05 and continued trading till February 28, 2005 at different rates including some at the highest price of `171/-, for trades involving 16,19,699 shares. The trading pattern of the Broker was such that both the buy and the sell orders had been placed at the same terminal simultaneously. While the clients with sell order would be a single or two clients, the order would be matched by a buy
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Source: SecMarx — sebi:WTM/KMA/ERO/IVD/370/03/2011. 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.