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TMI Blog2022 (8) TMI 422X X X X Extracts X X X X X X X X Extracts X X X X ..... market. In N. Narayanan v. SEBI [ 2013 (4) TMI 652 - SUPREME COURT] this Court observed that Section 12-A of the SEBI Act read with Regulations 3 and 4 of the PFUTP Regulations specifically aim to curb market manipulations which can have an adverse effect on investor confidence and the healthy growth of the securities market. The securities market deals with the wealth of investors. Any such manipulation is liable to cause serious detriment to investors wealth. In this backdrop, the order which has been passed by the WTM cannot be regarded as disproportionate so as to result in the interference of this Court in the exercise of its jurisdiction under Section 15Z of the SEBI Act. Moreover, the WTM has prohibited the appellant from participating in its proprietary account for a specified period, leaving it open to the appellant to continue operation in their broking account. Appeal dismissed. - Civil Appeal Nos 4262-4263 of 2022 - - - Dated:- 26-5-2022 - Hon'ble Dr. Justice D.Y. Chandrachud And Hon'ble Ms. Justice Bela M. Trivedi For the Appellant(s) : Dr. Abhishek Manu Singhvi, Sr. Adv., Mr. Anish Dayal, Sr. Adv., Mr. Navpreet Singh Ahluwalia, Adv., Mr. Nidh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n/dealers manually. Further, from 5,042 self-trades, the positive LTP contribution was Rs. 289.35 i.e. 12.64% of total market positive LTP. I also note that MBL accepted that single share self-trade was placed by it though according to it, to check the current price of GNCL by impermissible means. Thus, I am of the view that MBL had intentionally, through manual trading, placed the single share self-trade from same terminal to increase the price of GNCL for its own benefit. 5 The WTM has also observed as follows: 24. From the above, I note that during the period December 15, 2011 to February 24, 2012, MBL had continuously placed single share buy order immediately after placing sell order of large quantity at a price higher than the last traded price. These single share order got matched with its own sell order of large quantity resulted into self-trade of 1 share. This single share self-trades had increased the price of shares of GNCL, which benefit MBL. Thus, MBL had artificially manipulated the price of GNCL through single share self-trade. Hence, self-trades executed by MBL are intentional self-trades with an intention to manipulate price of the scrip of GNCL. 25. Con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... L had derived benefit through that particular scheme or nature of trading, I am of the view that the trading pattern adopted by MBL is of a manipulative and unfair nature and would fall within the ambit of the PFUTP Regulations. Hence, I do not find any merit in the submission of MBL that single share order placement could not impact either the price or volume of the scrip. 6 The above findings have been affirmed in appeal by the SAT, by its impugned order dated 13 May 2022. Submissions of Counsel 7 In the present case, it has been submitted on behalf of the appellant by Dr Abhishek Manu Singhvi, senior counsel, that: (i) The appellant had executed trades on fifty days between 15 September 2011 and 9 January 2015; (ii) The net gain which was involved is an amount of Rs 3.45 per share; and (iii) Over the entire duration of fifty days when the trades were carried out, the total profit which has been generated would be in the amount of Rs 2.61 lakhs, while the volume of trade represents only 0.04 per cent of the total market value which is spread over the abovementioned trading days; (iv) In this backdrop, the imposition of the bar from trading for a period of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1 24.00 0.55 Buy 2012020800042902 09:15:11.0000000 1 2. 24/01/2012 Sell 2012012400040557 09:15:32.0000000 2000 09:15:36 1 22.10 0.25 Buy 2012012400054569 09:15:36.0000000 1 3. 16/12/2011 Sell 2011121600122349 09:19:36.0000000 2000 09:19:36 1 16.65 0.15 Buy 2011121600122421 09:19:36.0000000 1 4. 23/12/2011 Sell 2011122300046781 09:15:34.000000 0 1000 09:15:35 1 16.50 0.15 Bu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sly impinges upon other counter parties in the securities market. In other words, the impact of a manipulation which is carried out by a participant in the securities market cannot be assessed only in terms of the gain which has been caused to the participants themselves, but in terms of the wider consequences of the action on the securities market. 13 In N. Narayanan v. SEBI (2013) 12 SCC 152 , this Court observed that Section 12-A of the SEBI Act read with Regulations 3 and 4 of the PFUTP Regulations specifically aim to curb market manipulations which can have an adverse effect on investor confidence and the healthy growth of the securities market. This Court made the following observations: 33. Prevention of market abuse and preservation of market integrity is the hallmark of securities law. Section 12-A read with Regulations 3 and 4 of the 2003 Regulations essentially intended to preserve market integrity and to prevent market abuse . The object of the SEBI Act is to protect the interest of investors in securities and to promote the development and to regulate the securities market, so as to promote orderly, healthy growth of securities market and to promote invest ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce 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 or dealing in securities which are listed or proposed to be listed on a recognised stock exchange; (c) engage in any act, practice, course of business which operates or would operate as fraud or deceit upon any person, in connection with the issue, dealing in securities which are listed or proposed to be listed on a recognised stock exchange, in contravention of the provisions of this Act or the rules or the regulations made thereunder; . [7] Regulation 3: - Prohibition of certain dealings in securities No person shall directly or indirectly- (a) buy, sell or otherwise deal in securities in a fraudulent manner; (b) use or employ, in connection with issue, purchase or sale of any security listed or proposed to be listed in a recognized stock exchange, any manipulative or deceptive device or contrivance in contravention of the provisions of the Act or the rules or the regulations made there under; (c) employ any device, scheme or artifice to defraud in connection with dealing ..... X X X X Extracts X X X X X X X X Extracts X X X X
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