sebi:WTM/RKA/IVD/ID-4/27/2013
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Facts / Headnote
Allegations established; certificate of registration of the Noticee suspended for 15 days.
Provisions invoked
- s. 19
- s. 12A
Regulations
- Reg. 7
- Reg. 3
- Reg. 4
- Reg. 28(2)
- Reg. 28
- Reg. 27
Parties
- Mr. Deepak C. Dalal, Proprietor of M/s Chandravadan J. Dalal (SEBI Registration No. INB011238715)
Holding
The Noticee, a stock broker, was found to have violated section 12A(a), (b) and (c) of the SEBI Act read with regulations 3 and 4 of the PFUTP Regulations and the Code of Conduct for stock brokers by aiding and abetting his connected clients in executing synchronised, reversed and circular trades to artificially inflate volumes in five scrips, and his certificate of registration was suspended for 15 days.
Full text
Page 2 of 22 dealt in the said five scrips during the relevant investigation periods and they had traded amongst themselves and contributed significantly to the market volumes of the said five scrips. A number of trades executed by them were synchronised/fictitious/manipulative in nature. Mr. Deepak C. Dalal Proprietor of M/s Chandravadan J. Dalal ('CJ Dalal'), a stock broker and member of the Bombay Stock Exchange Ltd. ('BSE') having SEBI registration No. INB011238715, had traded on behalf of some of those connected clients in the said five scrips during the relevant investigation periods. The clients of CJ Dalal ('the Noticee') were also clients of other stock brokers namely; Krishvi Securities Pvt. Ltd. ('Krishvi') and Lalkar Securities Pvt. Ltd.( 'Lalkar').
Page 3 of 22 6. After considering the Report, a show cause notice (SCN) dated October 4, 2012 under regulation 28 of the Intermediaries Regulations was issued to the Noticee calling upon him to show cause as to why a penalty as recommended by the DA or as deemed fit by the Board should not be imposed on him. A copy of the Report was also forwarded to the Noticee alongwith the SCN. The Noticee replied to the SCN vide its letter dated October 29, 2012 and requested for an opportunity of personal hearing which was granted to it on December 13, 2012. The noticee appeared on the scheduled date and made submissions. The Noticee, vide letter dated December 18, 2012, also filed his written submissions. The submissions of the Noticee inter alia are as under:-
Page 4 of 22 MTL Share Broker for 500 shares and B. D. Shroff for 150 shares. On July 4, 2008 he had two distinct clients i.e. Maruti and Chandra. Maruti wanted to sell and Chandra wanted to buy. As Maruti had bought these shares couple of days before the Noticee had no reason to doubt its intention. iv. The Noticee never indulged in synchronised, circular or reversal trades in the scrip as alleged in para 47 of the Report.
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Source: SecMarx — sebi:WTM/RKA/IVD/ID-4/27/2013. 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.