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TMI Blog2020 (2) TMI 1420X X X X Extracts X X X X X X X X Extracts X X X X ..... , Member 1. This appeal has been filed challenging the order of the Adjudicating Officer ('AO' for short) of Securities and Exchange Board of India ('SEBI' for short) dated March 28, 2019 whereby the appellants have been found to have violated Regulations 3(a),(b),(c) and (d) and regulations 4(1) and 4(2)(a) and (e) of the SEBI (Prohibition of Fraudulent and Unfair Trade Practices relating to Securities Market) Regulations, 2003 ('PFUTP Regulations, 2003' for short). Consequently, a penalty of Rs. 45,00,000/- on appellant no. 1 and Rs. 5,00,000/- on appellant no. 2 has been imposed under Section 15 HA of the SEBI Act, 1992. 2. The facts relevant to the matter are the following:- Appellants are individual traders. Appellant No. 1 is the mo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rders in single shares or in very small quantities at higher and higher price on 55 days during the relevant period thereby contributed to a total of Rs. 320.45 to market positive LTP through 52 trades. Therefore, it has been held that appellants' trade had been of a market manipulative nature and therefore appellants have violated the stated provisions of the PFUTP Regulations, 2003. 6. It is the contention of the learned counsel for the appellants Shri Prakash Shah that appellants in their capacity as individual investors were trading in the scrip of Zodiac in their normal course of business; appellant no. 1 was holding 15045 shares of Zodiac prior to the investigation period which she inherited from her father-in-law and bought another ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any connection with other entities or fund transfers etc. the learned counsel for the appellant relied on the orders of this Tribunal in respect of M/s. Nishith M. Shah HUF vs. SEBI (Appeal No. 97 of 2019 decided on January 16, 2020) and Sapna Dilip Bombaywala vs. SEBI (Appeal No. 219 of 2019 decided on January 28, 2020. 8. We have also heard Shri Kumar Desai, the learned counsel for the respondent SEBI who contended that the appellants' trading in the scrip of Zodiac is ex facie manipulative since appellants were the only sellers during most of the days and therefore but for the sell orders placed by the appellants, mostly in single shares each, no transaction would have fructified and no LTP would have been formed. The appellants mode of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ppellant No. 2 - 1009 shares), their selling miniscule quantity of one share each on more than four dozen occasions is nothing but a strategy of manipulation and unfairly benefiting by off-loading the entire shareholding after raising the price to considerable levels. The Appellant No. 1 was able to sell off 7000 shares on 17th, 18th, and 19th February, 2014 at prices ranging from 182.45 to 189.75. Similarly, on 21st, 24th and 25th March, 2014 the appellants together sold 10174 shares at prices in the range of 226.05 to 249.20. 10. We are also constrained to observe that this was a case where the buy side of the transactions also deserved to be analyzed in detail, which has not been done by the AO by just observing that there were large nu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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