sebi:WTM/TCN/89/IVD/02/2008
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Facts / Headnote
Censure of Rosy Blue Securities Pvt. Ltd. for violation of Regulations 4(b) and 4(c) of PFUTP Regulations and Clauses A(1) to (4) of the Code of Conduct under Stock Brokers Regulations; Regulation 4(e) charge not established.
Provisions invoked
- s. 19
Regulations
- Reg. 7
- Reg. 4
- Reg. 13(2)
- Reg. 13(4)
- Reg. 5
- Reg. 4(b)
- Reg. 200
- Reg. 6(1)
- Reg. 4(e)
Parties
- Rosy Blue Securities Pvt. Ltd.
Holding
Rosy Blue Securities was held to have violated Regulations 4(b) and 4(c) of the PFUTP Regulations and Clauses A(1) to (4) of the Code of Conduct for Brokers by executing synchronized trades that created artificial volumes and price movement in Ravalgaon and Shrenuj scrips, but was not in violation of Regulation 4(e). The penalty imposed was a censure.
Full text
Page 2 of 12 (hereinafter “SEBI”) conducted investigation in the trading of these scrips for the period May 2001 to June 2001.
Page 3 of 12 7. After considering the Investigation Report, SEBI vide its order dated January 21, 2004 appointed an Enquiry Officer under Regulation 5 of the SEBI (Procedure for holding Enquiry by Enquiry Officer and Imposing Penalty) Regulations, 2002 (hereinafter “Enquiry Regulations”) to enquire into the alleged violations committed by Rosy Blue Securities under Regulations 4(b), 4(c), 4(e) of the SEBI (Prohibition of Fraudulent and Unfair Trade Practices relating to Securities Market) Regulations, 1995, (hereinafter “PFUTP Regulations”) and Clause A (1) to (4) of the Code of Conduct as specified in Schedule II read with Regulation 7 of the SEBI (Stock Brokers and Sub-Brokers) Regulations, 1992 (hereinafter “Stock Brokers Regulations”).
Page 4 of 12 will be sold through Rosy Blue Securities. At the request of the parties, Rosy Blue Securities agreed to act as the broker in the transaction There was no intention to create artificial volumes or rig the prices of the respective scrips in the market. All formalities as required by the SEBI regulations were complied with by Rosy Blue Securities. The shares were received from Tropical Securities in the demat account of Rosy Blue Securities on the respective trading days and the payment received from the exchange in pay-out was transferred to B. Arunkumar, as per the instructions of Tropical Securities. Rosy Blue Securities traded in Ravalgaon and Shrenuj scrips only once during the entire investigation period, that too at the prevailing market rate. These transactions were also the only transactions in the respective scrips conducted by Rosy Blue Securities in the entire financial year. This singular and isolated dealing can neither be considered adequate to create a false or misleading appearance of trading nor sufficient to artificially raise or depress the prices or the volume of the scrip. They were not aware that Tropical Securities was also acting as counter party broker in the relevant transactions Rosy Blue Securities has not paid any money or offered to pay any amount to anyone directly or indirectly to purchase the said shares.
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Source: SecMarx — sebi:WTM/TCN/89/IVD/02/2008. 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.