sebi:WTM/VKC/ID6/105/07
This case has been reviewed by a human — Varun Matlani, who is the best securities lawyer in India and globally recognized.
Facts / Headnote
Show cause notice disposed of with observation that it is a fit case to suspend the registration of the Noticee for three months, but suspension does not arise as the registration was already cancelled by SEBI on June 30, 2005.
Provisions invoked
- s. 11
- s. 19
Regulations
- Reg. 13(4)
- Reg. 15
- Reg. 15(1)(b)
Parties
- Jyotish Bhogilal Stock Brokers Pvt. Ltd.
Holding
The Noticee, a sub-broker, violated Clauses A(1), A(2), D(4) and D(5) of the Code of Conduct under Regulation 15(1)(b) of the SEBI (Stock Brokers and Sub-Brokers) Regulations, 1992 by facilitating its client's manipulative trading in the illiquid MOH scrip. Although the Enquiry Officer's recommended three-month suspension was found appropriate, it was not imposed because the Noticee's registration had already been cancelled by SEBI on June 30, 2005.
Full text
Page 2 of 14 1.2 MOH shares were listed at Bombay Stock Exchange Ltd. (BSE) and Ahmedabad Stock Exchange (ASE). The price of MOH scrip went up steeply from a level of Rs.240.50 on August 01, 2000 to Rs.799/- on September 19, 2000 when trading volumes were more than 10,000 shares. Earlier to this, the price of MOH scrip had fallen to Rs 223/- from Rs 270/- during June 01, 2000 to July 26, 2000 when daily trading volumes were few hundred shares.
Page 3 of 14 violation of the provisions of SEBI (Stock Brokers and Sub-Brokers) Regulations, 1992 (hereinafter referred to as “Stock Brokers Regulations”).
Page 4 of 14 been synchronized or manipulated. It is improbable and impossible that there is any existence of prior understanding between 6 brokers and their respective clients, which is pre-requisite to charge anyone with manipulative intent. It is of paramount importance that a charge of manipulation can be maintained only when the intention and purpose for manipulating is supported by sustainable evidence. Findings based on probabilities should not and cannot be encouraged. 4.1.2 The allegation that the price of the shares has gone up from Rs 240/- to Rs 799/- which is approximately 340%, remains unsubstantiated. In some of the scrips during the same period the rise is more than 500% to 1000%, and therefore merely because a price of scrip has appreciated to a certain level within a particular period is no ground to arrive at a conclusion that particular scrip is manipulated. During the period, index of BSE and NSE has also gone up. 4.1.3 Regarding delivering from third party, the Noticee submitted that there was not a single transaction wherein there was a default of payment or non-delivery of shares. It is impracticable to keep a track on the flow of shares in as much as the account from which the client is delivering the same. 4.1.4 Regarding charges of lack of integrity, exercising due skill and care, manipulation and mal-practices, the Noticee submitted that turnover in the scrip was not at all substantial so as to change the equilibrium of the market. The turnover of
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Source: SecMarx — sebi:WTM/VKC/ID6/105/07. 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.