sebi:WTM/KMA/IVD/301/09/2010
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Facts / Headnote
Enquiry proceedings disposed of without any penalty; stock broker afforded benefit of doubt
Provisions invoked
- s. 19
Regulations
- Reg. 4
- Reg. 4(a)
- Reg. 28(2)
Parties
- HB Securities Limited
Holding
The enquiry proceedings initiated against HB Securities Limited in respect of its dealings in the shares of Alps Industries Limited during December 6, 2000 to March 13, 2001 are disposed of without any penalty, as violation of Regulation 4(a)-(d) of the PFUTP Regulations and Clauses A(1)-(5) of the Broker Code of Conduct was not established.
Full text
Page 2 of 9 Securities and Exchange Board of India (Prohibition of Fraudulent and Unfair Trade Practices Relating to Securities Market) Regulations, 1995 (hereinafter referred to as the PFUTP Regulations). Accordingly, SEBI, vide
Page 3 of 9 purpose of the trades executed by the stock broker was to create artificial volume in the shares of the Company. The specific finding of the Enquiry Officer made in this regard is reproduced below:
Page 4 of 9 between the entities involved in the trades. According to him, whatever conclusion arrived at by the Enquiry Officer was vague. According to him, it is not clear from the Enquiry Report as to whether the clients are connected to each other or the stock broker was connected to the clients on behalf of which the trades were executed. It is the case that there was nothing in the Enquiry Report to show that the stock broker and its clients are connected to each other. The allegation against the stock broker is that it had matched the orders of the other group entities which were placed at the same price and at the same time or almost the same time “with a view to create false or misleading appearance of trading in the scrip”. With this allegation in the
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Source: SecMarx — sebi:WTM/KMA/IVD/301/09/2010. 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.