sebi:WTM/KMA/IVD/389/06/2011
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Facts / Headnote
Enquiry proceedings disposed of without any penalty
Regulations
- Reg. 4(a)
- Reg. 28(2)
Parties
- Macy Shares and Stock Brokers Private Limited
Holding
The enquiry proceedings against Macy Shares and Stock Brokers Private Limited in the matter of Balaji Industrial Corporation Limited were disposed of without any penalty, holding it not guilty of contravening Clause A(2) of the Code of Conduct for stock brokers.
Full text
Page 2 of 4 buy orders for 41,200 shares at prices higher than the last traded price ranging from `0.03 to `15.38 in 46 trading days. In view of its transactions, it was alleged that the stock broker had violated Regulation 4(a) and 4(b) of the Securities and Exchange Board of India (Prohibition of Fraudulent and Unfair Trade Practices Relating to the Securities Market) Regulations, 1995 (hereinafter referred to as the PFUTP Regulations) and Clauses A(1) to A(5) of the Code of Conduct for the stock broker specified in Schedule II of the Securities and Exchange Board of India (Stock Brokers and Sub-brokers) Regulations, 1992 (hereinafter referred to as the Stock Brokers Regulations). The Designated Authority in his Report (hereinafter referred to as the Enquiry Report) dated February 9, 2011 found that the violation of Regulation 4(a) and (b) of the PFUTP Regulations and Clauses A(1), (3), (4) and (5) of the Code of Conduct for stock brokers specified in the Stock Brokers Regulations were not established. The Designated Authority while finding that the stock broker had violated Clause A(2) of the Code of Conduct for stock brokers specified in the Stock Brokers Regulations, recommended that a warning be issued to the stock broker.
Page 3 of 4 had obtained proper Know Your Client (KYC) form from the clients, as stipulated. It further stated that it had executed requisite agreements with its clients and that for the trades executed for the aforesaid clients, it had taken proper margin too. The stock broker further stated that all its transactions on behalf of the said clients were executed in good faith and in consonance with the rules and regulations of SEBI and the Stock Exchange. Further, actual delivery of shares was also carried out. According to the stock broker, no
Page 4 of 4 proof on record to conclusively establish the collusion between the stock broker and its clients for manipulating the scrip. It is submission of the stock broker that it had complied with all the rules and regulations of SEBI and the stock exchange, obtained KYC Form, executed proper agreements, collected proper margin and delivered the shares. Further, the transactions executed by the aforesaid clients (for which the stock broker is now charged with) were given a benefit of doubt. In view of the foregoing, in the interest of justice it would not be appropriate to find the stock broker guilty of contravening Clause A(2) of the Code of Conduct specified for stock brokers under the Stock Brokers Regulations. Considering the case in its totality, I dispose of the present enquiry proceedings as ordered herein below.
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Source: SecMarx — sebi:WTM/KMA/IVD/389/06/2011. 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.