sebi:WTM/TCN/72/IVD3/01/08
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Facts / Headnote
Censure imposed on SMC Global Securities Ltd
Provisions invoked
- s. 19
- s. 12
Regulations
- Reg. 7
- Reg. 13(4)
- Reg. 13
- Reg. 5
Parties
- M/s SMC Global Securities Ltd
Holding
SMC Global Securities Ltd was held to have failed to exercise due care and diligence in dealing with its clients in the scrip of DSQBL, in violation of Clause A(2) of Schedule II read with Regulation 7 of the Stock Brokers Regulations read with the SEBI Circular dated November 18, 1993, and was censured accordingly. The more serious charges of circular trading, offloading of unlisted shares, and being a person acting in concert (PAC) with DSQBL were not sustained against the broker.
Full text
2 1.3 At NSE, during the period December 1999 to April 2000, it was observed that the scrip was traded on 16 days rolling period out of the 99 days. The major clients in the cross deals were DSQ Industries, Square D Texiles, and Pilliyar Pattiyar Textiles Ltd., DSQ Holdings, etc. They were seen to be major buyers upto February 23, 2000 and then as consistent and heavy sellers from the period beginning February 24,
3 1.6 M/s. SMC Global Securities Ltd, (hereinafter referred to as “SMC”/ “the broker”) member of NSE registered with the Securities and Exchange Board of India (hereinafter referred to as “SEBI”) as a stock broker under Section 12 of Securities and Exchange Board of India Act, 1992 (hereinafter referred to as “the SEBI Act”) alleged to have entered synchronised transactions for the client at both the exchanges. It was alleged that the broker had actively aided and abetted the client in creation of the false market in the scrip by executing the transactions without the intention to transfer the beneficial interest in the securities.
4 3.0 Show Cause Notice and Reply 3.1 A copy of the enquiry report along with show cause notice dated November 7, 2006 was forwarded to SMC in terms of Regulation 13 (2) of the Enquiry Regulations advising it to show cause as to why appropriate penalty including penalty as recommended by the Enquiry Officer should not be imposed on it.
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Source: SecMarx — sebi:WTM/TCN/72/IVD3/01/08. 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.