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Issues involved: Appeal against penalty imposed by adjudicating officer u/s 15 I of SEBI Act for violating FUTP Regulation.
Issue 1: Violation of FUTP Regulation The appellant, an investor in a company's scrip, was penalized for violating regulations 3 and 4 of FUTP Regulation by artificially propping up the share price through manipulative trades. Investigations revealed the appellant's strategy of placing buy orders above the last traded price, contributing to the price increase. Despite denying manipulation, the appellant was found guilty by the adjudicating officer. Issue 2: Quantum of Penalty During the appeal, the appellant's counsel argued that the penalty of &8377; 2 lacs was excessive considering the appellant's status as a small investor and the minimal impact of the trades on the market. A comparison was drawn with another case where a lower penalty was imposed for similar actions. The Board's counsel defended the penalty, emphasizing the appellant's deliberate actions contributing to the price manipulation. Judgment: The Tribunal acknowledged the appellant's involvement in manipulating the share price, noting the similarity in modus operandi with another individual who received a lower penalty. While the appellant's actions were deemed less severe, a penalty reduction to &8377; 1 lac was considered just and reasonable based on the gravity of the offense and the number of trades involved. The appeal was partly allowed, and the penalty reduced accordingly.
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