sebi:WTM/SM/IVD/ID3/7272/2019-20
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Facts / Headnote
All five Noticees held in violation of PFUTP Regulations, 2003; restrained from accessing the securities market and prohibited from buying, selling or otherwise dealing in securities for a period of 1 year, with existing holdings frozen.
Provisions invoked
- s. 11
- s. 19
Regulations
- Reg. 3
- Reg. 4
- Reg. 3(a)
Parties
- Devang Mukundray Patel (Noticee no. 1)
- Sonal Devang Patel (Noticee no. 2)
- Manishaben Maheshkumar Patel (Noticee no. 3)
- Rajesh Kumar (Noticee no. 4)
- Kishor Sharma (Noticee no. 5)
Holding
The five Noticees were held to have violated Regulation 3(a), (b), (c), (d) and Regulation 4(1), 4(2)(a), (e) of the SEBI (PFUTP) Regulations, 2003 by deliberately placing miniscule buy orders (mostly 1 share at a time) to match pending sell orders below the LTP, thereby artificially driving down the price of the scrip of Cupid Trades & Finance Limited. They were restrained from accessing the securities market for a period of 1 year and their existing holdings frozen.
Full text
Order in the matter of Cupid Trades & Finance Limited. Page 2 of 21 and closed at ₹58.40. The net decrease in the scrip price was ₹90.60 (decrease of 60.80%).
Order in the matter of Cupid Trades & Finance Limited. Page 3 of 21 (c) It was further observed that during the relevant Investigation Period, the Noticee no. 4 (Rajesh Kumar) has contributed to negative LTP of ₹7.15 (7.70% of total negative LTP) by executing 6 buy trades and each of his 6 buy orders was placed for a quantity of 1 share only when the corresponding sell order quantities were very large. (d) Similarly, Noticee no. 5 (Kishor Sharma) also has contributed to negative LTP of ₹16.75 (18.05% of negative LTP) through 3 buy trades and each of the 3 buy trades was placed for quantity of one share only when the corresponding prevailing sell order quantity was available in the range of 1000-1987 shares. (e) Investigation observed that by executing in the manner as narrated above, buy trades, the aforesaid 5 Noticees have deliberately matched the prices of prevailing sell orders which were already placed at a lower price than the last traded price and thereby contributed to the decrease in share price of the Company with every successive buy trade executed by these Noticees.
Order in the matter of Cupid Trades & Finance Limited. Page 4 of 21 6. I note from the records that the aforesaid SCN was delivered to all the Noticees, in response to which Noticee no. 4 has submitted a written reply vide his letter dated October 10, 2017. Subsequently, in compliance with the principle of natural justice, an opportunity of personal hearing was granted to all the Noticees and accordingly hearing notices dated January 23, 2019 were issued to all the Noticees intimating them that the date for personal hearing has been scheduled on February 20, 2019. I observe from the records that the hearing notices were duly serviced to all the Noticees, however only Noticee no. 4 appeared before me on the scheduled date of hearing. I further note from the record that an Authorized Representative (“AR” for convenience) of Noticee no. 5 has requested inspection of certain documents including Investigation Report which were duly provided by SEBI on February 15,
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Source: SecMarx — sebi:WTM/SM/IVD/ID3/7272/2019-20. 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.