2025 (11) TMI 786 - SCH - SEBI

Broker breached duty by permitting synchronized and self-trades, violating Code of Conduct clause A(2); penalty under s.15HB upheld, appeal dismissed

SC upheld the Tribunal's finding that the broker breached duty by failing to exercise due skill, care and diligence, permitting synchronized and ... Synchronized trades and self-trades - Breach of duty - stock broker failed to exercise due skill, care and diligence in the conduct of his business - violating clause A(2) of Code of Conduct for Stock Brokers as specified under Schedule II read with Regulation 7 of SEBI Regulations, 1992 - imposition of penalty u/s 15 HB - doctrine of disproportionality - Tribunal held that, It is the duty of the stock broker under the Brokers Regulations to constantly monitor the trades executed by the client through the internet based trading platforms so as to ensure that the trades are executed in accordance with law and do not disturb the market equilibrium - Act of indulging in self trades is itself a straightforward violation which calls for a penalty. HELD THAT:- Tribunal has not committed any error in law or fact. Further, this appeal does not involve any question of law as required under Section 15Z of the Securities and Exchange Board of India Act, 1992. Appeal is dismissed. The Securities Appellate Tribunal's decision is affirmed: the Tribunal 'has not committed any error in law or fact.' The appeal was evaluated under the statutory standard for appeals from SEBI-related orders and found not to raise a legal question within the meaning of Section 15Z of the Securities and Exchange Board of India Act, 1992. Because the matter does not involve any such question of law, the Court held that there is no jurisdictional basis to interfere with the SAT's determination, and accordingly the Civil Appeal 'is dismissed.'