ADOLF PINTO Vs. ADJUDICATION OFFICER SECURITIES AND EXCHANGE
SECURITIES APPELLATE TRIBUNAL
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N.K.Sodhi, Presiding Officer (Oral) -
(1.) THIS appeal is directed against the order dated August 30, 2010 passed by the adjudicating officer imposing a monetary penalty of Rs. 2 lacs on
the appellant for violating Regulation 4 of the Securities and Exchange
Board of India (Prohibition of Fraudulent and Unfair Trade Practices
relating to Securities Market) Regulations, 2003 (for short FUTP
regulations) and code of conduct prescribed for stock brokers in Schedule
II read with Regulation 7 of the Securities and Exchange Board of India
(Stock Brokers and Sub -Brokers) Regulations, 1992.
(2.) THE Securities and Exchange Board of India carried out investigations in the trading in the scrips of BSEL Infrastructure Realty Ltd. and
Maharashtra Seamless Ltd. (referred to hereinafter as BSEL and MSL
respectively) to examine the role of brokers, sub -brokers and their
clients who had traded in these scrips. Investigations revealed that
certain entities including the appellant had executed synchronized /
reverse / circular trades which led to the creation of artificial volumes
in the scrips. The appellant is a stock broker who had executed trades on
behalf of his son who was his client in both the scrips and those trades
were circular in nature. Adjudication proceedings were initiated against
him and he was served with a show cause notice alleging violation of the
aforesaid provisions. He field a reply the relevant part of which reads
as under -
1. I deny that my son Kenneth Pinto has synchronized trades and that I have created artificial volume in the scrip of BSEL and MSL, and further
manipulated the price of BSEL and MSL. From the trade log it is noticed
that I have not traded at the opening bell or a few minutes of the
opening bell but after substantial volume have taken place, any
manipulations trade is simply is not possible. It is a mere figment of
imagination. Even, if there is a co -relation, it is a mere coincidence,
hence the allegation of synchronized trading is uncalled for.
2. I deny that I have colluded with certain brokers / clients for transacting in the scrip of BSEL / MSL, the trades if they matched with
rate and quantity is a mere coincidence, as I do not know / related with
any other broker / clients my trade is mere jobbing in nature.
(3.) I deny all the above allegations and state that this is a mere coincidence. I deny that I know the opposite enteritis and my trades are
merely jobbing transaction, as we have not given or taken delivery of
shares. Further there are no ill -gotten gains.
I further state that these trades happened unknowingly, unwittingly and with no intent.;
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