sebi:WTM/TCN/138/IVD1/JAN/09
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Facts / Headnote
Direction to be careful in future and exercise due care and diligence; no penalty imposed; show cause notice for higher penalty not sustained
Provisions invoked
- s. 19
Regulations
- Reg. 7
- Reg. 13(2)
- Reg. 4(a)
- Reg. 15
- Reg. 199
- Reg. 28(2)
- Reg. 13(5)
- Reg. 10
Parties
- M/s Apex Stock Brokers Pvt. Ltd.
Holding
The broker was directed to exercise due care and diligence in future, but no penalty was imposed because the show cause notice failed to set out legally sustainable grounds for enhancing the penalty beyond that recommended by the Enquiry Officer.
Full text
2 approximately 75% of the total trades in the scrip on BSE through 14 member brokers/sub brokers . 2. It was alleged that these connected or the related clients including clients of M/s. Apex Stock Brokers Pvt. Ltd. (hereinafter referred to as “the Broker”) viz., Shri Baban Sonate, Ms. Rekha Vakharia, Shri Chandrakant K Shah, traded through its sub brokers M.S. Consultancy Services and Mahek Consultants influenced the price of the scrip by creating artificial volume in the market thereby violating the provisions of Regulation 4(a),(b), (c) and (d) of SEBI (Prohibition of Fraudulent and Unfair Trade Practice relating Securities Market) Regulations 1995 (hereinafter referred to as “PFUTP Regulations”). It was further alleged that the sub broker failed to exercise due care and diligence and violated clauses A(1),(2),(3),(4) and (5) of Code of Conduct as specified in schedule II under Regulation 15 of the SEBI (Stock Brokers and Sub Brokers) Regulations, 1992 (hereinafter referred to as “Stock Brokers Regulations”).
3 violating the provisions of Regulation 7 read with Clause A (2) of Code of Conduct specified under Schedule II of the Stock Broker Regulations. The enquiry officer submitted his report March 21, 2005 recommending a minor penalty of warning to the broker.
4 6. An opportunity of personal hearing was granted to the broker on September 05, 2006 before me. Shri J. J. Bhatt, Advocate attended the hearing on behalf of the broker and made submissions. Further written submissions were submitted vide letter dated September 30, 2006 stating that there was no proprietary trading in the scrip of Database. Further the broker submitted that the transactions were carried out by their sub brokers for their clients in the normal course of business and their gain was confined to only brokerage income of about Rs. 4390. There is no evidence to prove the main charge of prolonged trading by the clients and there is no cogent rational reason to consider higher penalty as proposed.
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Source: SecMarx — sebi:WTM/TCN/138/IVD1/JAN/09. 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.