2012 (12) TMI 1144 - AT - Companies Law

Summary

Issues involved: Violation of Regulation 4(2)(b) of FUTP Regulations, imposition of monetary penalty under Section 15HA of SEBI Act.

Summary:
The appeal was filed against the order of the adjudicating officer of SEBI holding the appellant guilty of violating Regulation 4(2)(b) of FUTP Regulations and imposing a penalty of Rs. 18 lacs under Section 15HA of SEBI Act. The appellant, a registered stockbroker, engaged in proprietary trades in the scrip of a company during a specific period. The investigation revealed irregularities in trading activities, including self-trades with entities leading to price manipulation. The appellant was issued a show cause notice, denied the charges, but was found guilty by the adjudicating officer and penalized. The appeal challenged this decision.

The Securities Appellate Tribunal upheld the findings of the adjudicating officer, emphasizing that the appellant's trades with connected parties, involving loans for trading resulting in price rise, violated Regulation 4(2)(b) of FUTP Regulations. The Tribunal rejected the appellant's argument regarding lack of action against counter parties, stating that equality before the law does not imply immunity from individual violations. The Tribunal also considered the penalty amount, noting disparities in penalties imposed on similar violators and reduced the penalty from Rs. 18 lacs to Rs. 3 lacs, citing considerations of justice and proportionality.

In conclusion, the Tribunal affirmed the guilt of the appellant for violating FUTP Regulations, reduced the penalty to Rs. 3 lacs, and imposed no additional costs.