2019 (11) TMI 1555

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....irected for suspension of certificate of registration of the appellant as a stock broker for a period of three months for violation of the provisions of Sections 12A(a), (b) and (c) of the SEBI Act, 1992 read with regulations 3, 4(1), 4(2)(a), (e) and (g) of the SEBI (Prohibition of Fraudulent and Unfair Trade Practice relating to Securities Market) Regulations, 2003 ("PFUTP Regulations" for convenience) and regulation 7 read with Clauses A and B(2) of Schedule II (Code of Conduct for Stock Brokers) of the SEBI (Stock Brokers and Sub-brokers) Regulations, 1992 ("Stock Brokers Regulations" for convenience). 2. From the impugned order it appears that, SEBI had conducted investigation into the suspected fraudulent tradings in the shares of Ga....

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....e impugned order, the details of the trades of Purshottam Khandelwal are given. It would show that Purshottam Khandelwal had indulged in 133 synchronized trades, 138 circular trades within the Vishvas Group. It was found that in price manipulation Purshottam Khandelwal was highest and significant contributor to both positive LTP and negative LTP. So far as the present appellant is concerned, the allegation is that it has allowed these fraudulent trades in the above manner. It was found that on May 02, 05, 10 and 12 of 2016 there were 8,7,13 and 9 synchronized trades respectively executed through the appellant by Purshottam Khandelwal. Similarly, 711 self trades in 65,025 shares were also executed through the present appellant. Price manipu....

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....cident, copy of the new KYC was provided. The copy of the old KYC was kept in godown however the same could not be traced. Therefore, for the clerical mistake as detailed above the appellant came to be punished. As regard the contract notes, he submitted that on demand of the client-Purshottam Khandelwal a consolidated statement of contract notes for the period was issued. The same cannot be termed as a serious offence. He further relied on certain other orders of WTM for seeking lesser penalty in the alternative. 6. On the other hand, learned counsel for the respondent Shri Kumar Desai, SEBI submitted that the appellant was not slapped with the penalty merely for above two derelictions but also for allowing Purshottam Khandelwal to indulg....

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....vailable. The order of the WTM for these facts therefore needs no interference. As regard the penalty, we find that a different yardstick is adopted by the WTM in this regard. At "Exhibit-L" page 401 of the Memorandum of the Appeal we have the order of the WTM dated April 13, 2017 in respect of ISF Securities Limited ("ISF") in the same issue of trading in the share of Gangotri. The broker therein was found to have executed proprietary trades in the scrip of Gangotri both in BSE and NSE in fraudulent manner. In paragraph number 18 of the order the WTM has concluded that the said trader i.e. ISF is liable for having indulged in manipulative, deceptive and fraudulent transactions in the securities market. In the said case the designated auth....