9911796707
TMI Blog2013 (2) TMI 521X X X X Extracts X X X X X X X X Extracts X X X X ..... he appellants. The above penalties were imposed under section 15HA of the Securities and Exchange Board of India Act, 1992 (the Act) in relation to the violation of regulations 3 and 4 of the Securities and Exchange Board of India (Prohibition of Fraudulent and Unfair Trade Practices Relating to Securities Market) Regulations, 2003 (FUTP Regulations). 2. The Board investigated the trading activity of the appellants. It was observed that the group, while trading through B P Equities Pvt. Ltd., was trading ahead of the trades of Citigroup Global Markets Mauritius Pvt. Ltd. (CGMMPL) for the period October 01, 2008 to December 31, 2008 and the trades were put in with prior knowledge of the trades of CGMMPL. The impugned trades related to the o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d there was no knowledge about the counter party and time of execution. According to him, the transactions were at the market rate and they were not dictated by any prior information from Mr. Suresh Menon as alleged. It was submitted by him that there was no "front running" in the transaction in the alleged scrips and the adjudicating officer wrongly held the appellants as violating regulations 3 and 4 of the FUTP Regulations. He also made a reference to the order of this Tribunal Dipak Patel v. Adjudicating Officer, SEBI [2012] 4.1 The learned senior counsel appearing for the Board reiterated all the arguments which were advanced in support of the order in the case of Dipak Patel (supra) mentioned supra. He also mentioned that the transcr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... annot be accepted. However, in the case of Dipak Patel referring to the regulation 4(2)(q) of the FUTP Regulations we have taken a view that the said regulations bar "front running" only by intermediaries and not by traders. We have drawn this conclusion because of the specific departure made by the regulator while framing the regulations of 2003 and repealing the regulations of 1995. This is what we have observed in the case of Dipak Patel (supra). "13. We are inclined to agree with learned counsel for the appellants that the 1995 Regulations prohibited front running by any person dealing in the securities market and a departure has been made in the Regulations of 2003 whereby front running has been prohibited only by intermediaries. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ned senior counsel for the Board that the provisions of regulation 3 are wide in their sweep and application. However, the fact remains that regulation 4(2)(q) of the FUTP Regulations has made a specific provision in respect of manipulative, fraudulent and unfair trade practices indulged in by an intermediary. The legal position as regards the provisions of section 4(2)(q) has been dealt with at length in the order of this Tribunal in the case of Dipak Patel (supra) mentioned above. When a specific provision is available in respect of violation of the regulations it is necessary to apply the specific regulation. In the present case, the general provisions contained in regulation 3 of the FUTP Regulations cannot be applied to the facts of th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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