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TMI Blog2015 (7) TMI 129X X X X Extracts X X X X X X X X Extracts X X X X ..... ), (b), (c), (d) and 4(1), 4(2)(a), 4(2)(b) and 4(2)(g) of Securities and Exchange Board of India (Prevention of Fraudulent and Unfair Trade Practices) Regulations, 2003 (PFUTP Regulations), has preferred this appeal before this Tribunal against the Impugned Order. Appellant No.2 (Arcadia Shares & Stock Brokers Private Limited) has preferred appeal before this Tribunal against same order of Adjudication Officer, Securities and Exchange Board of India, referred to above, for imposition of penalty of Rs. 3,00,000 under Section 15HA of Securities and Exchange Board of India Act, 1992 ("SEBI Act" for short) for violation of provisions of Regulations 3(a) (b), (c), (d) and 4(1), 4(2)(a), of PFUTP Regulations and imposition of penalty of Rs. 2,00 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... contributor in increase in LTP as well as decrease in LTP and by placing orders above LTP in 20 trades, increased price of VIL scrip by Rs. 650.50 and by placing orders below LTP in 28 trades, decreased price by Rs. 306.25; thus contributed Rs. 344.25 to net LTP increase. Further, it is stated that Appellant No.1's self-trade in 6 instances and traded for 12 shares (actual number is 11) during September 22, 2010 to March 30, 2012 and in 4 instances, out of 6, orders were placed near to LTP and in other two instances order were placed above LTP and in 2 instances, out of six, Arcadia Share & Stock Brokers Pvt. Ltd. was the broker and counter-party broker. It is also stated in SCN - para 6 - that Appellant No.1, established new high price dur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ient and helped your client in making illegal gains. What gains are made in self trade is not apparent. Since sale and buy price is the same, since one client is on buy as well as sale side; but since same broker placed orders for sale as well for buy for client and hence executed self-trades for Appellant No.1 is not in dispute, but how acts of Appellant No.1 are violative of some regulations of SEBI (PFUTP) Regulations, some sections of SEBI Act, 1992 and some regulations of SEBI (Broker & Sub-Brokers) Regulations, has not been explained in this SCN. 7. Hence only allegation that is justifiably made against Appellant No.2 in SCN is of self-trade. As a matter of fact, Ld. A.O. does not follow up allegation of "mandatory profit gained by A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ler placing buy/sell order for Appellant No.1 was not aware of existing pending sell/buy order of Appellant No.1, while placing orders. Appellant No.2 has also submitted that 2 self trades of Appellant No.1 took place from trading terminal of its sub-broker and orders in trading system are placed after viewing, informing and considering best available buy and sell order in existing trading terminal, and at no time, orders were put higher than best available prices and incident of self trading was coincidence and not outcome of any design. 10. Ld. A.O. has stated thereafter that Appellant No.1 was a small time investor trading through various brokers, dealt in VIL scrip - which was illiquid had executed 6 self trades involving 11 shares of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h it was meagre. Here total trading by Appellant No.1 in VIL scrip during I.P. was not meagre - but 10.37% of market volume, but this total trading is being analyzed from point of view of few (6) instances of self-trade, which were meagre compared to total trading-involving 375 trades and 1206 shares of VIL and hence the two trades - self trades and total trades - have been mixed up by Ld. A.O. However, total trades of Appellant No.1 including trades at above/below LTP - resulting in net increase positive increase of LTP - and trades of Appellant establishing new high and new, have not been held manipulative by Ld. A.O. in SCN and as a matter Appellant No.1 has not been held violative of market manipulation due to his total trading. 13. Ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e not been considered and dealt with. 16. Hence, it is seen that Ld. A.O. did not include relevant allegations of market manipulation of Appellant No.1 due to his total trades and self-trades in SCN appropriately and thereafter not dealing with only sustainable allegations of self-trade of Appellant No.1 - partly executed by Appellant No.2 - by sound and logical reasoning in I.O. and also not dealt appropriately with submissions of Appellant No.2 for his execution of self trades of Appellant No.1 and hence the impugned order is quashed and set aside, but since, it is evident, that Appellant No.1 did indulge in manipulative trades by executing 375 trades, involving 1206 shares in scrip of VIL and contributed to increase/decrease in LTP and ..... X X X X Extracts X X X X X X X X Extracts X X X X
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