sebi:WTM/RKA/ID-4/47/2012
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Facts / Headnote
Benefit of doubt given; SCN dated June 11, 2012 disposed of without penalty
Regulations
- Reg. 28
Holding
The noticee broker was given the benefit of doubt on the allegations of creating or aiding artificial volumes through synchronized trades in Bang, Confidence and Temptation, and the show cause notice was disposed of without imposition of penalty.
Full text
Page 2 of 3 3. The DA conducted proceedings to enquire into the allegations that the noticee alongwith/ in collusion with the stock broker /'connected clients' had created artificial volumes/ aided and abetted in the creation of artificial volumes through synchronized deals in the scrips of 'Bang', 'Confidence' and 'Temptation'. It was also alleged that the noticee failed to exercise due care, skill and diligence while trading/ dealing in the aforesaid three scrips. The DA in his report dated April 20, 2012 gave benefit of doubt to the noticee in respect of its alleged dealings on behalf of its clients in the scrip of 'Bang' and 'Confidence'. However, he found that the noticee while trading/dealing on behalf of its clients in the scrip of 'Temptations' has failed to exercise due care, skill and diligence and has thereby violated/ contravened the provisions of clause A(2) of the Code of Conduct for Stock Brokers specified under schedule II of the Brokers Regulations. The DA recommended that the noticee may be warned to avoid recurrence of such violations.
Page 3 of 3 those clients, it cannot be said that the noticee did not exercise due care, skill and diligence as found by the DA.
4. After considering the Report of the DA, a show cause notice (SCN) dated June 11, 2012 under regulation 28 of the Intermediaries Regulations was issued to the noticee calling upon it to show cause as to why the appropriate action including the penalty recommended by the DA, should not be imposed upon it. The noticee replied to the SCN vide its letter dated June 25, 2012, and requested for an opportunity of personal hearing. Accordingly an opportunity of personal hearing was granted to the noticee on September 18, 2012. Shri Prakash Shah, Chartered Accountant and Shri Kapil Thacker, Director of the noticee appeared on the scheduled date and made their submissions.
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Source: SecMarx — sebi:WTM/RKA/ID-4/47/2012. 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.