sebi:WTM/RKA/IVD/ID-5/13/2013
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Facts / Headnote
Noticee prohibited from taking up any new assignment for a period of one week from the date of the order
Provisions invoked
- s. 19
- s. 12(3)
Regulations
- Reg. 7
- Reg. 3
- Reg. 4(1)
- Reg. 28(2)
- Reg. 28
Parties
- M/s. Transparent Shares and Securities Private Limited
Holding
The noticee was held to have contravened regulation 4(1) of the PFUTP Regulations and clauses A(1), A(4) and A(5) of the Code of Conduct read with regulation 7 of the Stock Brokers Regulations, but not guilty of violating regulation 3 of the PFUTP Regulations. The noticee was prohibited from taking up any new assignment for a period of one week.
Full text
Page 2 of 6 shares and 9,500 shares, respectively by the noticee. 4. Based on the findings of investigation, SEBI initiated proceedings against the noticee in terms of SEBI (Intermediaries) Regulations, 2008 (hereinafter referred to as 'the Intermediaries Regulations') and appointed the Designated Authority ('DA') to inquire into the alleged violation of the provisions of regulations 3 (a), (b), (c), (d) and 4 (1) of the SEBI (Prohibition of Fraudulent and Unfair Trade Practices Relating to Securities Market) Regulations, 2003 (hereinafter referred to as ‘PFUTP Regulations’) and regulation 7 read with clauses A(1), A(3), A(4) and A(5) of the Code of Conduct for stock brokers as specified in Schedule II of the SEBI (Stock Brokers and Sub Brokers) Regulations, 1992 (hereinafter referred to as ‘Stock Brokers Regulations’).
Page 3 of 6 IPO on February 06, 2009 and the written request letters were issued by them on February 12, 2009. Therefore, the noticee had applied for 1,60,000 shares of ESL on behalf of the said clients and later taken delivery of the shares for them. The credits were also transferred to the respective client's account. This itself establishes that there was no mala fide intent. The noticee acted in good faith so that its clients do not lose the opportunity of subscribing in the IPO. (c) The above act of the noticee was not manipulative or fraudulent and there was no manipulative intent in applying in the IPO of ESL. The noticee had indulged in such transaction for the first time and was not aware that such practice was wrong. It had complied with all other applicable regulations. The noticee earned a total of `7700 only by executing the said transaction. Had it been known that such transaction was wrong, it would not have done so for earning `7700. The noticee was ignorant and applied in the IPO of ESL for the benefit and interests of its clients. (d) The noticee has requested that a lenient view may be taken and if at all it is decided that the act of the noticee was wrong, a warning may be issued to it.
Page 4 of 6 The stock-broker holding a certificate shall at all times abide by the Code of Conduct as specified at Schedule II. Code of Conduct (Schedule II) - A. General (1) Integrity: A stock-broker, shall maintain high standards of integrity, promptitude and fairness in the conduct of all his business. (4) Malpractices: A stock broker shall not create false market either singly or in concert with others or indulge in any act detrimental to the investors interest or which leads to interference with the fair and smooth functioning of the market. A stock broker shall not involve himself in excessive speculative business in the market beyond reasonable levels not commensurate with his financial soundness. (5) Compliance with statutory requirements: A stock-broker shall abide by all the provisions of the Act and the rules, regulations issued by the Government, the Board and the Stock Exchange from time to time as may be applicable to him.
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Source: SecMarx — sebi:WTM/RKA/IVD/ID-5/13/2013. 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.