9911796707
TMI Blog2014 (3) TMI 1172X X X X Extracts X X X X X X X X Extracts X X X X ..... clear that the appellant has sought to create a misleading impression that a large number of persons were trading in the scrip. This lends support to the finding of the adjudicating officer in paragraph 20 of the impugned order. It must not be forgotten that every trade establishes the price of the scrip and the noticee s trading at higher than LTP resulted in the price of the scrip going up and were done with a view to set the price at a desired level and thereby influencing the innocent/gullible investors. By purchasing at a higher price in most of his trades, the noticee had given the wrong impression about the price of the scrip in the market. It is an accepted state of affairs that in cases of manipulation of the volume and / o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mil Bhavnagari is the proprietor, bought 2,05,051 shares and sold about 23,000 shares. During the investigation period, it was noted that the price of the scrip rose from ₹ 65/- on December 4, 2003 to ₹ 307/- on February 3, 2004 within less than a period of two months. Such a sharp rise in the price of the scrip was mostly attributed to singular trades with negligible volumes. The price of the scrip thereafter fell to ₹ 25.70 on June 1, 2004 inspite of high volumes as compared to the earlier patch. 3. During December 2003 and June 2004, the appellant traded as a buying client in 85 trades out of a total number of 175 trades executed during the said period. Out of these 85 trades, the appellant, in many cases, placed ord ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nipulating the price of the scrip and imposed a monetary penalty of ₹ 5 lac under Section 15HA of the SEBI Act for violation of Regulation 4(1) and 4(2)(e) of the FUTP Regulations. These regulations are reproduced hereinbelow for the sake of convenience :- 4(1). Without prejudice to the provisions of regulation 3, no person shall indulge in a fraudulent or an unfair trade practice in securities. 4(2)(e) any act or omission amounting to manipulation of the price of a security. 6. We have heard both the learned counsel for the parties at length and perused the pleadings and other material brought to our notice. At the outset, we note that trading in the scrip of AIL by the appellant on various occasions as mentioned in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appellant were below the LTP. This was done evidently with ulterior motives, because, if shares were available for a lesser price, there was no reason to place orders at a price higher than the LTP and if orders at prices higher than LTP were placed on account of the financial status of the company then there was no reason to place some orders below the LTP. 8. In this connection, it may also be worthwhile to note that the investigation report clearly reveals that better financial status of the company was revealed at the end of the financial year, whereas many trades undertaken by appellant were in December 2003 i.e. much prior to the disclosure of the financial status by the company. Therefore, plea advanced by the appellant that he tr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s it evident that it is the appellant who has traded with Code No. 872 by placing repeated orders with a nominal increase of 5 paisa or so on numerous occasions. Some of the examples of trades undertaken by the appellant are highly revealing and produced hereunder for easy reference : 1. On December 10, 2003, he purchased 50 shares at ₹ 72 which was lower than the LTP by ₹ 0.10. Thereafter, 10 trades of 500 shares, each were executed at the rate of ₹ 76.80 per share by some other persons. The last 2 trades of the day were executed by the appellant for 50 shares each at ₹ 76.90 and ₹ 81 i.e. ₹ 0.10 and ₹ 4.10 above LTP. From the aforesaid, it is, therefore, clear that the appellant is responsible ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... noticee had given a wrong impression about the liquidity of the scrip in the market. It must not be forgotten that every trade establishes the price of the scrip and the noticee s trading at higher than LTP resulted in the price of the scrip going up and were done with a view to set the price at a desired level and thereby influencing the innocent/gullible investors. By purchasing at a higher price in most of his trades, the noticee had given the wrong impression about the price of the scrip in the market. 12. It is an accepted state of affairs that in cases of manipulation of the volume and / or price of a particular scrip, it is usually an arduous task to obtain direct evidence. However, the analysis of the trade and order logs as un ..... X X X X Extracts X X X X X X X X Extracts X X X X
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