sebi:WTM/KMA/ERO/IVD/94/07/09
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Facts / Headnote
Enquiry proceedings disposed of; no further penalty imposed on the stock broker, taking into account the period of prohibition already undergone.
Provisions invoked
- s. 19
Regulations
- Reg. 7
- Reg. 28(2)
- Reg. 4(2)(a)
Parties
- M/s. Shyam Lal Sultania, Member, Calcutta Stock Exchange Association Limited (Registration no. INB 030700513)
Holding
The Broker, M/s. Shyam Lal Sultania, was held guilty of contravening Regulation 7 of the Broker Regulations read with Clause A(1) to A(4) of the Code of Conduct under Schedule II, and of contravening Regulation 4(2)(a) and 4(2)(e) of the PFUTP Regulations, for executing synchronised/cross/self trades that manipulated the share price. However, no further penalty was imposed, as the period of prohibition already undergone was taken into account.
Full text
Page 2 of 9 India (Stock Brokers and Sub-Brokers) Regulations, 1992 (hereinafter referred to as the Broker Regulations). In order to protect the interest of investors and also the integrity of the securities market, SEBI, vide an ad-interim ex parte
Page 3 of 9 3. Accordingly, SEBI, vide order dated January 04, 2007 read with a subsequent order dated November 19, 2007 appointed an Enquiry Officer under the provisions of the Securities and Exchange Board of India (Procedure for Holding Enquiry by Enquiry Officer and Imposing Penalty) Regulations, 2002 (hereinafter referred to as Enquiry Regulations) to enquire into the alleged violations committed by the Broker. The Enquiry Regulation was since repealed with effect from the notification of the Securities and Exchange Board of India (Intermediaries) Regulations, 2008. The Designated Authority (hereinafter referred to as the Enquiry Officer), after considering the facts and circumstances of the case and the materials available on record, submitted the Enquiry Report dated March 20, 2009 in terms of the provisions of the Securities and Exchange Board of India (Intermediaries) Regulations, 2008 and recommended that the certificate of registration issued by SEBI to the Broker be suspended for a period of six months. The Enquiry Officer further recommended that the period of prohibition already undergone by the Broker in terms of SEBI orders dated November 30, 2005 and May 31, 2006 might be taken into account while imposing the recommended the penalty.
Page 4 of 9 iii. that all its trades were purely on behalf of the clients without any malafide intention of creation of artificial price and volumes in the scrip of the company. That it had never carried out illegal trading iv. that it had never done any act which would have jeoparadized the safety and integrity of the market v. that it had always tried to maintain high standards of integrity, promptitude and fairness in the conduct of its business. vi. that it had already suffered for almost 2.5 years due to the interim orders of SEBI.
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Source: SecMarx — sebi:WTM/KMA/ERO/IVD/94/07/09. 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.