sebi:WTM/TCN/32/IVD/06/07
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Facts / Headnote
Minor penalty of suspension of certificate of registration for a period of one month imposed on M/s. Paragon Investments Pvt. Ltd.
Provisions invoked
- s. 11
- s. 19
Regulations
- Reg. 7
- Reg. 13(4)
- Reg. 11
- Reg. 4
- Reg. 13(2)
- Reg. 4(a)
- Reg. 6(1)
- Reg. 2
- Reg. 9
Parties
- M/s. Paragon Investments Pvt. Ltd.
Holding
Paragon Investments Pvt. Ltd. was held guilty of violating Regulation 4(a), (b), (c) & (d) of the PFUTP Regulations, 1995 and Clauses A(3) and A(4) of the Code of Conduct for Stock Brokers, and a minor penalty of suspension of its certificate of registration for one month was imposed.
Full text
2 1.2 SEBI conducted investigation into the trading in the scrip of SSPL subsequent to unusual increase in the price and volume of the scrip during the period May 3, 2001 to July 6, 2001. Based on the above unusual rise in price and volume in the scrip an investigation was conducted by SEBI. It was noticed that the price and volume rise of the scrip was not supported by the fundamentals of the company. During the aforesaid investigation period, it was noticed that a group of entities were acting in concert for executing synchronised and structured trades to affect the price of the scrip. 1.3 M/s. Paragon Investments Pvt. Ltd. (hereinafter referred to as “Paragon”), broker of Saurashtra Kutch Stock Exchange Ltd. (hereinafter referred to as SKSE) is registered with SEBI having registration number INB181152738. Paragon was alleged to have executed transaction for Mayur Patel, Gautam Patel and Aarushi Consultancy who were involved in manipulation of the scrip and were charged of violating the provisions of Clause A(2) (3) and (4) of the Code of Conduct as specified in Schedule II of Regulation 7 of the SEBI (Stock Brokers and Sub Brokers) Regulations, 1992 (hereinafter referred to as “Stock Brokers Regulations”) in Regulation 4(a), (b), (c) and (d) of SEBI (Prohibition of Fraudulent and Unfair Trade Practices), 1995 (hereinafter referred to as “PFUTP Regulations”).
3 Officer and Imposing Penalty) Regulations, 2002 (hereinafter referred to as “Enquiry Regulations”), a show cause notice was issued to Paragon vide letter dated March 16, 2005 asking them to show cause as to why communicating the charges against it. It was alleged that Paragon had violated the provisions of Regulation 4 of the PFUTP Regulations and clauses A(3) and A (4) of the code of conduct as specified in Schedule II of the Regulation 7 of the Stock Brokers Regulations. 2.2 Paragon vide its letter dated March 25, 2005 replied to the notice and made submissions in detail. 2.3 In terms Regulation 9 of the Enquiry Regulations an opportunity of hearing was granted to Paragon on June 9, 2005 before the Enquiry Officer. Shri Rajini Patel, Director of Paragon attended the hearing and made submissions. On completion of enquiry, the Enquiry Officer vide report dated June 27, 2005 recommended a penalty of suspension of certificate of registration of Paragon for a period of four months.
4 market manipulation going on. Just after 3 months it was in touch with Shri Gautam Vaghasia who gave them the work of SSPL.
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Source: SecMarx — sebi:WTM/TCN/32/IVD/06/07. 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.