sebi:WTM/PS/13/IVD/ID-3/MAY/2010
Facts / Headnote
Noticee found guilty of violating PFUTP Regulations, Code of Conduct under Broker Regulations and SEBI circular; warned to be careful and cautious in conduct of business instead of imposing the penalty recommended by the Enquiry Officer.
Provisions invoked
- s. 19
Regulations relied on
- SEBI (Intermediaries) Regulations, 2008
- SEBI (PFUTP) Regulations, 1995
- SEBI (PFUTP) Regulations, 2003
- SEBI (Stock Brokers) Regulations, 1992
Parties
- Swadha Securities Pvt. Ltd.
Holding
The noticee, Swadha Securities Pvt. Ltd., was found guilty of violating Regulations 4(a) and (d) of the PFUTP Regulations, Clause B 4(a) and (b) of the Code of Conduct under the Broker Regulations, and SEBI Circular SMDRP/POLICY/CIR-32/99, and was warned to be careful and cautious in the conduct of its business rather than penalised as recommended by the Enquiry Officer.
Full text
Page 2 of 7 rise in price of the scrip was not supported by improvement in the fundamentals or any corporate actions of TFC. It was revealed that the trading was highly concentrated within top 10 stock brokers who had traded in the scrip. The said stock brokers were found to be engaged in self trades which led to increase in volumes. This trading had accounted for 81.25% of gross purchases, 82.63% of gross sales, 2.18% of net purchases and 2.37% of net sales. It was revealed that inspite of such trading concentration, the net purchase and sales was very small. Because of this, the brokers had no delivery positions to the exchange on most of the days.
Page 3 of 7 February 19, 2010, in terms of Regulation 27 of SEBI (Intermediaries) Regulations, 2008, recommending thereby prohibition to take up any new assignment for a period of three weeks to noticee for violating Regulation 4(a) and (b) of PFUTP Regulations read with Regulation 13 of SEBI (Prohibition of Fraudulent and Unfair Trade Practices Relating to Securities Market) Regulations, 2003, Clauses B 4(a) and (b) of the Code of Conduct specified under Schedule II of the Broker Regulations and SEBI Circular No. SMDRP/Policy/Cir-32/99 dated September 14, 1999.
Page 4 of 7 - It would be unjustifiable and against the principles natural justice if it is penalized for the same offence during the same period again and again. - It has taken all steps to rectify the mistakes and further ensured that such mistakes will not be repeated.
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Source: SecMarx — sebi:WTM/PS/13/IVD/ID-3/MAY/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.