New Delhi, Oct 13 (PTI) Regulator Sebi today slapped atotal penalty of Rs 15 lakh on an individual for indulging insynchronised trading and acting as a portfolio manager withoutregistration.
The matter is related to trading in the scrips of R MMohite Textiles and Atlas Cycles (Haryana).
While the regulator imposed a fine of Rs 10 lakh on oneAmit Joshi for violating PFUTP (Prohibition of Fraudulent andUnfair Trade Practices Relating to Securities Market)Regulations, a penalty of Rs 5 lakh was levied on him for notcomplying with Sebi Act and Portfolio Managers Regulations,according to an order.
The Securities and Exchange Board of India (Sebi) hadconducted an investigation in the shares of RM Mohite TextilesLtd (RMTL) and Atlas Cycles (Haryana) Ltd (ACL) for the periodfrom November to December 2007.
Following the investigation, it was alleged that Joshihad violated various norms while trading in the scrips of RMTLand ACL on behalf of one Pegasus Stocks and Shares Pvt Ltd.
In the order, the regulator noted it is clear that Joshiagreed with Pegasus for managing its portfolio with a mutualunderstanding as to sharing the profits.
"Amit (Joshi) was acting as a portfolio manager on behalfof Pegasus without holding a valid certificate ofregistrations from Sebi as such," the regulator said.
Sebi also noted how all the trades on behalf of Pegasusin the scrips of ACL and RMTL were executed by Amit insynchronisation with related entities.
"The modus operandi used by Amit (Joshi) is to buy thestock (RMTL and ACL) at a higher price and sell the same atlower price to Nitin Gordia and Rita to enable them to receivethe benefit of price difference through synchronised andreversal trades and loss to Pegasus," Sebi said.
Synchronised trading refers to a practice where theseller and buyer may have an understanding between them ontrading of specific shares.
According to Sebi, Gordia and Rita are husband and wifeand are known to Amit Joshi.
The regulator said by creating artificial volume, Joshithrough his connected persons has defrauded other investorsand misused the stock exchange mechanism.
In a separate order, Sebi imposed a penalty of Rs 8 lakhon Covidh Technologies Ltd for the firm's failure to maketimely disclosures as required under PIT (Prohibition ofInsider Trading). PTI VRNMKJ.
This is unedited, unformatted feed from the Press Trust of India wire.