sebi:WTM/KMA/NRO/IVD/230/02/2010
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Facts / Headnote
Certificate of registration of Moongipa Securities Limited suspended for five months
Provisions invoked
- s. 19
Regulations
- Reg. 4
- Reg. 4(a)
- Reg. 13(2)
- Reg. 28(2)
Parties
- Moongipa Securities Limited
Holding
SEBI held that Moongipa Securities Limited violated Regulation 4(a), (b) and (c) of the PFUTP Regulations, Clauses A(1) to A(5) of the Code of Conduct for stock brokers, and SEBI Circulars dated March 14, 1995 and August 5, 1996, by engaging in synchronized/structured deals that rigged share prices, and suspended its certificate of registration for five months.
Full text
Page 2 of 13 Broker had contravened Regulation 4(a),4(b) and 4(c) of the 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), Clauses A (1) to A(5) of the Code of Conduct specified for stock brokers under Schedule III of the Securities and Exchange Board of India (Stock Brokers and Sub-brokers) Regulations, 1992 (hereinafter referred to as the Broker Regulations), SEBI Circulars dated March 14, 1995 and August 5, 1996 and DSE Bye Law nos. 348 and 349. Thereafter, SEBI appointed an Enquiry Officer, vide order dated August 24, 2004 in terms of the provisions of Securities and Exchange Board of India (Procedure for Holding Enquiry by Enquiry Officer and Imposing Penalty) Regulations, 2002 (since repealed) to enquire into the alleged violations committed by the Broker. The Enquiry Officer submitted the Report dated July 27, 2005 recommending the suspension of the certificate of registration of the Broker for a period of four months. The Enquiry Officer found that the Broker had violated Regulations 4(a), 4(b) and 4(c) of the PFUTP Regulations and Clauses A(1) to A(5) of the Code of Conduct specified for stock brokers under Schedule III of the Broker Regulations. The Enquiry Officer also found that the Broker guilty of violating SEBI Circulars dated March 14, 1995 and August 5, 1996.
Page 3 of 13 the fact that Mr. Vimal Mehta was its director is insufficient to show any collusion with it to rig the share price. With regard to the joint account of Mr. R.
Page 4 of 13 needed to be enhanced and subsequently, a notice dated September 24, 2009 was issued to the Broker advising it to show cause as to why a higher penalty to that recommended by the Enquiry Officer and as considered appropriate by SEBI should not be imposed against it. Thereafter, the Broker, vide letter dated October 12, 2009 inter alia stated that such a recommendation was without the authority of law. According to the Broker, there is no scope to issue a fresh show cause notice either under the provisions of the Enquiry Regulations or under the Intermediaries Regulations. Thereafter, an opportunity of hearing was afforded to the Broker before me on December 18, 2009. Mr. Abdulla Hussain, as authorized by the Broker appeared before me and made submissions. Mr. Sanjay Jain, director of the Broker was also present during the hearing. The Broker had also filed its written submissions dated December 18, 2009 during the hearing, reiterating its earlier submissions.
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Source: SecMarx — sebi:WTM/KMA/NRO/IVD/230/02/2010. 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.