SHIVAM INVESTMENTS (PROP. MRS. SUSHMA KAPUR) 801, INTERNATIONAL TRADE TOWER, NEHRU PLACE, NEW DELHI - 110019 Vs. SECURITIES AND EXCHANGE BOARD OF INDIA SEBI BHAVAN, C-4A, G BLOCK, BANDRA KURLA COMPLEX, BANDRA (EAST), MUMBAI - 400051

JUDGEMENT

(1.) THIS order will dispose of three Appeals no. 23, 24 and 26 of 2012. These appeals are against imposition of penalty for violating the provisions of Regulations 3 and 4 of the Securities and Exchange Board of India (Prohibition of Fraudulent and Unfair Trade Practices relating to Securities Market) Regulations, 2003 (for short 'FUTP Regulations) and for violating the provisions of Code of Conduct of Stock Brokers contained in Securities and Exchange Board of India (Stock Brokers and Sub -brokers) Regulations, 1992 (for short 'Stock Broker regulation). The adjudicating officer imposed penalties as under in respect of the above mentioned violations.

(2.) PEE Dee Kapur Stock and Securities Ltd. - Rs. 1 lac for FUTP violation and Rs. 75,000 for violation of Code of Conduct. (Appeal No. 26 of 2012)

(3.) THE learned counsel for the Board argued that manipulation of market through cross trades and self trades is hit by the definition of fraud as appearing in Regulation 2(1)(c) of FUTP Regulations. It is observed that manipulation of trades is writ large in the self trades and cross trades indulged in by the appellants. The absence of price manipulation is not material to the wrong doing committed by the appellants. With a reference to the trade logs which are annexed to the show cause notice it is pointed out that the appellants have attempted to register the trades in such a way that there was rise in volume on a day to day basis and this undoubtedly called for penal action. According to the learned counsel for the Board, the inter se connection of the appellants and the connected entities is very clearly set out in the impugned order and the appellants have indulged in the manipulation of trades through the connected entities. With regard to the volume of trades and the trades executed on the BSE it is observed that the appellants' trades on the NSE clearly established manipulation and the comparison with over all trades in both the exchanges is not relevant in as much as the wrong doing in the trades in NSE stands established.