sebi:WTM/KMA/ERO/IVD/63/04/2009
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Facts / Headnote
Broker found guilty of violations but no further penalty imposed beyond the 33 months of prohibition already undergone
Provisions invoked
- s. 19
Regulations
- Reg. 28(2)
- Reg. 4(2)(o)
Parties
- Ahilya Commercial Private Limited
Holding
Ahilya Commercial Private Limited was found guilty of violating Regulation 4(2)(o) of the PFUTP Regulations and Clause A(2) of the Code of Conduct under the Broker Regulations for executing synchronized trades and cross deals that created a misleading appearance of trading and manipulated share prices. However, no further penalty was imposed beyond the 33 months of prohibition already undergone under SEBI's interim orders.
Full text
Page 2 of 9 Securities Market) Regulations, 2003 (hereinafter referred to as the PFUTP Regulations) and Securities and Exchange Board of India (Stock Brokers and Sub- Brokers) Regulations, 1992 (hereinafter referred to as the Broker Regulations). Thereafter, in order to protect the interest of investors, SEBI, vide an ad-interim ex-parte order dated November 30, 2005 inter alia directed various stock brokers including Ahilya Commercial Private Limited (Member, CSE) not to buy, sell or deal in securities, in any manner, either directly or indirectly, till further directions. Subsequently, after affording an opportunity of hearing to the aggrieved persons, SEBI, vide order dated May 31, 2006, confirmed the directions passed vide the ad-interim order dated November 30, 2005, as stated therein.
Page 3 of 9 3. Thereafter, vide order dated September 20, 2006 read with a subsequent order dated November 23, 2007, SEBI appointed an 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Board of India (Procedure for Holding Enquiry by Enquiry Officer and Imposing Penalty) Regulations, 2002 (since repealed). When the proceedings were pending before the Enquiry Officer, SEBI vide order dated August 11, 2008, for the reasons stated therein, vacated the directions passed vide interim orders dated November 30, 2005 and May 31, 2006, as against the stock brokers. In the meanwhile, the Securities and Exchange Board of India (Procedure for Holding Enquiry by Enquiry Officer and Imposing Penalty) Regulations, 2002 was repealed with effect from the notification of the Securities and Exchange Board of India (Intermediaries) Regulations, 2008. Though, the 2002 Regulations were repealed as stated above, anything done and any action taken under the 2002 Regulations (mentioned above) before the publication of the 2008 Regulations (mentioned above) in the Official Gazette are deemed to have been done or taken or commenced under the corresponding provisions of the 2008 Regulations. The Enquiry Officer/Designated Authority (hereinafter referred to as the Enquiry Officer), vide report dated November 19, 2008 recommended the suspension of the certificate of registration of the Broker for a period of one month. The Enquiry Officer, keeping in view the interim orders of SEBI (mentione
Page 4 of 9 opportunity of hearing. However, the Broker neither submitted a reply to the said show cause notice nor sought for a personal hearing in the matter. Sufficient time was given to the Broker to file its reply/submission. However, the Broker failed to do so. In the facts and circumstances, I do not consider it appropriate to grant another opportunity to the Broker and I dispose of the present proceedings on the basis of the available material on record.
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Source: SecMarx — sebi:WTM/KMA/ERO/IVD/63/04/2009. 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.