Sebi Imposes Rs 55 Lakh Fine on 6 Entities for Fraud Trades - The New Indian Express

Sebi Imposes Rs 55 Lakh Fine on 6 Entities for Fraud Trades

Published: 01st January 2014 06:36 PM

Last Updated: 01st January 2014 06:36 PM

Market watchdog Sebi has slapped a fine of Rs 55 lakh on six entities for alleged fraudulent trading in the shares of Priyadarshini Spinning Mills.

The Securities and Exchange Board of India (Sebi), in its yesterday order, imposed a penalty of Rs 15 lakh on Pardeep Aggarwal, Rs 12 lakh on Jag Par Securities, Rs 10 lakh on Abhi Capital Services, Rs 8 lakh on Nisha Aggarwal and Rs 5 lakh each on Neelam Mehra and Ashish Mehra.

The regulator had conducted a probe in share trading of the company and found a sharp rise in Priyadarshini Spinning Mills scrips during October 28, 2009 to July 9, 2010.

According to Sebi, Pardeep and other five entities connected to him had traded in the shares of the company. They altogether purchased 71.23 lakh shares and sold 65.90 lakh scrips of the company.

It is also observed that Pardeep was holding 3.69 per cent stake in the company during the quarter ended December 2009 which increased to 6.3 per cent at March end 2010 and later decreased to 5.29 per cent during the three months ended June 2010.

"...noticees (six entities) were regularly placing orders at incremental higher prices which resulted into new high price thereby misleading gullible investors. The noticees, as a group repeated indulged into trades at a higher price, and on many instances, the order of one entity of the group matched with the order of another entity of the group," Sebi said.

"The entities belonging to the group have employed as well as aided and abetted in employing manipulative and deceptive devices of trading which led to creation of volume and price volatility in the scrip of the company," it added.

Therefore, Sebi said that the trading pattern were manipulative of volume as well as price and thereby violating PFUTP (Prohibition of Fraudulent and Unfair Trade Practices relating to Securities market) Regulations.

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