sebi:WTM/PS/08/IVD/ID-6/MAY/2011
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Facts / Headnote
Warning issued to the noticee under Section 19 of the SEBI Act, 1992 read with Regulation 28(2) of SEBI (Intermediaries) Regulations, 2008; allegations of PFUTP violations not established.
Provisions invoked
- s. 19
Regulations
- Reg. 7
- Reg. 3
- Reg. 5(1)
- Reg. 4(a)
- Reg. 28(2)
- Reg. 28
- Reg. 27
- Reg. 38(2)
Parties
- Madhukar Chimanlal Sheth
Holding
The noticee was found to have violated Clauses A(1), A(2) and A(5) of the Code of Conduct under Schedule II read with Regulation 7 of the Broker Regulations for failure to exercise due care in collecting client details and for accepting third party delivery, and was warned accordingly; the allegations of PFUTP violations were not established.
Full text
Page 2 of 6 2. The scrip of CSL was trading at around Rs.1,200/- per share in the month of September 2000. Pursuant to the sub-division of the equity shares from Rs.10/- to Rs.2/-, the price was proportionally reduced to Rs.186/- with effect from September 26, 2000. Since then, the price of the scrip moved in the range of Rs.190/- to Rs.147/- till February, 2001. Thereafter, M/s. Century Consultants Ltd. (hereinafter referred to as ‘CCL’), a company related to CSL, member of NSE and BSE defaulted and the price of the scrip of CSL fell everyday by 16% (Lower Circuit).
Page 3 of 6 Designated Authority (hereinafter referred to as the ‘Enquiry Officer’) submitted his Report dated June 16, 2009, in terms of Regulation 27 of SEBI (Intermediaries) Regulations, 2008, recommending thereby that the noticee be issued a warning for violating of the Code of Conduct specified under Schedule II of the Broker Regulations.
Page 4 of 6 i. Whether the noticee made payments for sale transactions to the clients prior to the payout at the exchange, and thereby, aided and abetted the alleged manipulation of trading in the scrip by financing them? ii. Whether the client registration forms of the clients were incomplete and whether the noticee violated the Code of Conduct for Brokers under the Broker Regulations
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Source: SecMarx — sebi:WTM/PS/08/IVD/ID-6/MAY/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.