sebi:WTM/TCN/89/IVD3/DEC/08
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Facts / Headnote
Penalty of suspension of certificate of registration for one month imposed on M R Share Broking Pvt. Ltd.; penalty of suspension of certificate of registration for six months imposed on Kolar Sharex Pvt. Ltd. Both orders to come into effect on expiry of 21 days from the date of the order.
Provisions invoked
- s. 19
Regulations
- Reg. 4
- Reg. 7
- Reg. 13(2)
- Reg. 4(a)
- Reg. 28(2)
Parties
- M R Share Broking Pvt. Ltd. (Stock Broker, BSE, SEBI Regn. No. INB011076834)
- Kolar Sharex Pvt. Ltd. (Member, BSE, SEBI Regn. No. INB011105138)
Holding
The WTM held that M R Share Broking Pvt. Ltd. violated Regulations 4(a)-(d) of the PFUTP Regulations, 1995 and Clause A(2) of the Code of Conduct under Schedule II of the Stock Brokers Regulations, 1992 by executing circular trades creating a false and misleading appearance of trading in the scrip of Soundcraft Industries Limited, and imposed a one-month suspension of its registration certificate. The WTM also held that Kolar Sharex Pvt. Ltd. and its related entities violated the PFUTP Regulations and Clauses A(2), (3) and (4) of the Code of Conduct by indulging in circular trading and structured deals to create artificial price and volume, and imposed a six-month suspension of its registration certificate.
Full text
1 WTM/TCN /89/IVD3/DEC/08 BEFORE THE SECURITIES AND EXCHANGE BOARD OF INDIA CORAM: Dr. T.C.NAIR, WHOLE TIME MEMBER ORDER UNDER REGULATION 28(2) OF THE SEBI (INTERMEDIARIES) REGULATIONS, 2008. 1.1 Soundcraft Industries Limited (hereinafter referred to as “SIL”/ “the Company”) is a public limited company. The shares of the company are listed at the Bombay Stock Exchange Limited (hereinafter referred to as “BSE”) and the National Stock Exchange of India Limited (hereinafter referred to as “NSE”).
2 fluctuating volumes during the relevant period. It was observed that a handful of brokers and clients had deliberately tried to establish a price in the scrip and maintained the price at specific level. These volumes were artificial, as only a set of few brokers and clients were involved throughout the trading in this scrip during the relevant period.
3 Enquiry Regulations and found that the broker executed large number of synchronised transactions on behalf of the client on the buy side as well as sell side in the scrip of SIL and was instrumental in creating false and misleading appearance of trading in the scrip. The Enquiry Officer submitted report dated March 31, 2006 recommending a penalty of suspension of certificate of registration for a period of six months.
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Source: SecMarx — sebi:WTM/TCN/89/IVD3/DEC/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.