Misc. Application No. 79 of 2012 and Appeal No. 141 of 2012. Case: Ajmera Associates Ltd. Carmello's Building, 63/67, Pathakwadi, L.T. Marg, Crawford Market, Opp: Ashoka Shopping Centre, Mumbai 400002 Vs Securities and Exchange Board of India SEBI Bhavan, Plot No. C-4A, G-Block, Bandra Kurla Complex, Bandra (E), Mumbai- 400051. Securities and Exchange Board of India
| Case Number | Misc. Application No. 79 of 2012 and Appeal No. 141 of 2012 |
| Judges | P.K. Malhotra, Member & Presiding Officer (Offg.) and S.S.N. Moorthy, Member |
| Issue | Securities and Exchange Board of India Act, 1992 - Section 15HB |
| Judgement Date | November 21, 2012 |
| Court | Securities and Exchange Board of India |
Judgment:
P.K. Malhotra, Member & Presiding Officer (Offg.)
-
The appellant before us is a stock broker registered with the Securities and Exchange Board of India (the Board) and is trading at the Bombay Stock Exchange and National Stock Exchange. It is also a depository participant of Central Depository Services India Limited and a trading member of MCX-SX. The allegation against the appellant is that it traded, along with other brokers, in the scrip of Advik Laboratories Limited (the company) on behalf of its clients who traded in the scrip of the company synchronizing their trades, creating artificial volumes and price rise enabling the promoter shareholders to offload their shares at a higher price. The appellant was charged with violating regulations 4(1), 4(2) (a), (b), (e) and (g) of Securities and Exchange Board of India (Prohibition of Fraudulent and Unfair Trade Practices relating to Securities Market) Regulations, 2003 (FUTP Regulations) and Clause A(1) to A(5) of Code of Conduct for Stock Brokers prescribed in Schedule II under Regulation 7 of the Securities and Exchange Board of India (Stock brokers and Sub-brokers) Regulations, 1992 (Code of Conduct).
-
After conducting an enquiry in accordance with the laid down procedure, the charge of violation of FUTP Regulations was dropped observing as under:
-
Regulation 4(2) (a) of PFUTP prohibits a person from indulging in an act which creates false or misleading appearance of trading in the securities market. Regulation 4(2) (b) of PFUTP prohibits dealings in a security intended to operate as a device to inflate, depress or cause fluctuations in the price of such security for wrongful gains. Regulation 4(2) (e) of PFUTP prohibits any act or omission amounting to manipulation of the price of a security. Regulation 4(2) (g) of PFUTP prohibits from entering into a transaction in securities without intention of performing it or without intention of change of ownership of such security.
-
In the present case, I find that there is no material on record to suggest that the Noticee traded in the scrip of ALL with the intention of creating a false of misleading appearance of trading. Further the investigation report has not brought out how the Noticee has inflated, deflated or caused fluctuation in the price of the scrip. I observe that the trading of shares were delivery based, hence the ownership of the shares traded also changed. Therefore, the allegation of violation of regulations...
To continue reading
Request your trial