Appeal Nos. 53/71/72/ of 2012. Case: 1. Hemant Sheth, 2. Bhavesh Pabari, 3. M/s Shree Radhe Vs Adjudicating Officer, Securities and Exchange Board of India. Securities and Exchange Board of India

Case Number:Appeal Nos. 53/71/72/ of 2012
Party Name:1. Hemant Sheth, 2. Bhavesh Pabari, 3. M/s Shree Radhe Vs Adjudicating Officer, Securities and Exchange Board of India
Counsel:For Appellants: Mr. J. J. Bhatt, Advocate with Ms. Rinku Valanju, Ms. Urmila Thakar, Advocates and For Respondents: Mr. Kumar Desai, Advocate with Mr. Mihir Mody, Advocate
Judges:J. P. Devadhar, Presiding Officer, Jog Singh, Member & A. S. Lamba, Member
Issue:Securities and Exchange Board of India Act, 1992 - Sections 15HA, 15A(a); Securities and Exchange Board of India (Prohibition of Fraudulent and Unfair Trade Practices Relating to Securities Market) Regulations, 2003 - Regulations 4(2)(a), (b) and (g)
Judgement Date:September 10, 2013
Court:Securities and Exchange Board of India
 
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Judgment:

J. P. Devadhar, Presiding Officer

  1. By consent, these three appeals are heard together and disposed of by this common decision.

  2. Appeal no. 53 of 2012 is filed to challenge adjudication order dated December 30, 2011 by which penalty of Rs. 20 lac is imposed upon appellant therein under Section 15HA of the Securities and Exchange Board of India Act, 1992 ('SEBI Act' for short). Appeal No. 71 of 2012 and 72 of 2012 are filed to challenge adjudication orders both dated December 30, 2011 by which penalty of Rs. 20 lac under Section 15HA and penalty of Rs. 10 lac under Section 15A(a) of the SEBI Act is imposed upon each appellants.

  3. For sake of convenience, facts in appeal no. 53 of 2012 are set out hereinbelow. Counsel for parties agree that decision in appeal no. 53 of 2012 would apply to Appeal No. 71 of 2012 and 72 of 2012 in so far as they relate to imposing penalty of Rs. 20 lac under Section 15HA of SEBI Act on appellants therein.

  4. On noticing that during the period from April 10, 2006 to September 8, 2006 major clients including appellants herein were connected and had executed self, reversal and synchronized trades in the scrip of Gulshan Polyols Limited, erstwhile Gulshan Sugars & Chemicals Limited (GPL for short), Securities and Exchange Board of India (SEBI for short) conducted investigation during the period commencing from January 12, 2006 to December 29, 2006 (Investigation period for convenience).

  5. On completion of investigation, show cause notice was issued to appellant in Appeal no. 53 of 2012 on January 17, 2011 calling upon him to show cause as to why inquiry should not be held and penalty should not be imposed for violating provision of Securities and Exchange Board of India (Prohibition of Fraudulent and Unfair Trade Practices Relating to Securities Market) Regulations, 2003 ('FUTP Regulations' for short). Reply to said show cause notice was filed by appellant, wherein all allegations made in the show cause notice were denied. On issuance of supplementary show cause notice dated July 20, 2011, additional reply was filed on July 26, 2011 denying all allegations made in the supplementary show cause notice. Thereafter, personal hearing was granted, wherein appellant reiterated that alltransactions were genuine and there was no violation of any regulations framed by SEBI.

  6. By adjudication order dated December 30, 2011 all contentions of appellant in Appeal no. 53 of 2012 were rejected and penalty of Rs. 20 lac was imposed upon appellant under Section 15HA of the SEBI Act for violating Regulations 4(2)(a), (b) and (g) of the FUTP Regulations. Challenging that order dated December 30, 2011, present appeal is filed.

  7. Mr. Bhatt, learned counsel appearing on behalf of appellants submitted soft copies of trade...

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