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TMI Blog2019 (9) TMI 1477X X X X Extracts X X X X X X X X Extracts X X X X ..... the impugned order that the appellant could not produce any evidence relating to her contention that she was trading on behalf of a client, namely, Perfect Car Scanners Pvt. Ltd. Trading by the Vishvas Group as a whole and individually by the appellant was substantial quantity as explained in para 4 (supra) of this order and there were synchronized trades, reversal trades as well as manipulation of LTP. Therefore, the findings in the impugned order that the appellant has violated the stated provisions of SEBI Act and PFUTP Regulations 2003 cannot be faulted. The orders relied on by the appellant do not come to her help.he trading details, its nature, time etc. reveal the manipulation in the scrip of Gangotri. Apart from stating that that the appellant has no connection with the Vishvas group the appellant could not explain why and how so many of her trades were in the nature of synchronized and reversed trades and that too most of the times within a few seconds with trades of other entities in the Vishvas group. Such synchronization and reversal of trade is not possible without a prior meeting of minds as held in SECURITIES AND EXCHANGE BOARD OF INDIA VERSUS KISHORE R. AJMERA ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... this Tribunal remanded the matter to the AO SEBI with the following direction:- Since the question as to whether the appellant traded on the Stock Exchange at Mumbai as a sub-broker or in individual capacity goes to the root of the matter, we deem it proper to quash and set aside the impugned order and restore the matter for fresh decision on merits and in accordance with law. 3. Thereafter, SEBI appointed a fresh AO. Further, a notice dated August 24, 2017 was issued to the appellant seeking to specifically clarify whether all the transactions with regard to the appellant's dealings in the scrip of Gangotri during the period of investigation as alleged in the original show cause notice were carried out in the capacity of a sub-broker. The appellant was also advised to submit all documents relating to her registration as sub-broker along with copy of the KYC documents in support of her submissions. Further, after giving multiple opportunities of personal hearing and replies etc. the order impugned in this appeal has been passed. 4. In the impugned order it is held that a number of entities collectively called Vishvas group, including the appellant herein, have manipu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... egal as held by this Tribunal in the matter of Ketan Parekh v. SEBI [Appeal No. 2 of 2004, dated 14-7-2006] Appellant had no intention to manipulate the market and was doing normal trading business on behalf of her clients therefore if at all any manipulation was involved it was done by the clients, no by the appellant. In any case, it was impossible to manipulate the market as the trading had been done on the exchange platform, on the anonymous trading screen. (d) The AO did not consider the fact that the appellant was trading for her clients as a sub-broker and as a sub-broker she could have traded in any stock exchange in India following the order of the Hon'ble High Court of Delhi in the matter of National Stock Exchange Member v. Union of India[2006] 70 SCL 151 which held that a broker needs to take only a single registration with SEBI even if a stock broker has membership of, and functions from, several stock exchanges. Accordingly, the learned counsel contends that the AO is in contempt of court as this order of Hon'ble Delhi High Court was not appealed against and has attained finality. By holding that a SEBI registered sub-broker of Delhi Stock Exchange could no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rsuant to amendment to broker regulations in the year 2003 sub brokers were prohibited from handling funds and securities of clients and issuing contract notes to clients. Therefore, there is no laxity in the finding of the AO that the appellant was executing her trades in the capacity as a client and not in the capacity of a sub broker of BSE. 7. We do not find any fault in holding that the appellant has violated provisions of the SEBI Act and PFUTP Regulations as held in the impugned order. 8. For convenience the relevant Sections of SEBI Act and Regulations of PFUTP Regulations, 2003 are reproduced here:- SEBI Act, 1992 Section 12-A. Prohibition of manipulative and deceptive devices, insider trading and substantial acquisition of securities or control - No person shall directly or indirectly - (a) use or employ, in connection with the issue, purchase or sale of any securities listed or proposed to be listed on a recognized stock exchange, any manipulative or deceptive device or contrivance in contravention of the provisions of this Act or the rules or the regulations made thereunder; (b) employ any device, scheme or artifice to defraud in connection with issue ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... What is disputed by the appellant is that she had no connection with the Vishvas group and synchronization / circularity happened just by chance. However, given the proximity of time between trading by these entities and the number of such instances of trades we are unable to appreciate this submission of the appellant. Further, the contention of the appellant is that appellant was trading as a sub broker and the matter was remanded to SEBI by this Tribunal on April 29, 2016 mainly on this ground. However, it is clearly demonstrated in the impugned order that the appellant could not produce any evidence relating to her contention that she was trading on behalf of a client, namely, Perfect Car Scanners Pvt. Ltd. 10. The impugned order at page 20 states the following reasons:- (i) There is no documentary evidence to demonstrate the dealings of the Noticee on behalf of client in terms of bank account transactions, demat account transactions, ledgers, contract notes as mentioned above. (ii) The Noticee was registered as client of Parasram since June 2002 and executed the impugned trades as client of Parasram; (iii) As per the order trade log, the orders were placed and ..... X X X X Extracts X X X X X X X X Extracts X X X X
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