TMI Blog2012 (12) TMI 1146X X X X Extracts X X X X X X X X Extracts X X X X ..... ractices Relating to Securities Market) Regulations, 2003 (for short the FUTP regulations) and imposing a penalty of ` 8 lacs under Section 15HA of the Securities and Exchange Board of India Act, 1992 (the Act). 2. The facts of the case, in brief, are that the appellant, an individual, is an investor and a trader in the share market. The Board conducted investigations into buying, selling and dealing in the scrip of Asian Star Company Ltd. (the company) for the period October 10, 2008 to November 20, 2008 and noticed wide variation in the price of the scrip. The role of the brokers and their clients, who traded in the scrip of the company on the Bombay Stock Exchange, was scrutinized and it was observed that certain entities, connected ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... red trades. The details of the trading done by the appellant through Swastika Investment Mart Ltd., a market intermediary, were also provided to the appellant. It was noted that the appellant had lent his name and allowed trading in his account. The appellant s account was operated by Pradesh Nimawat and Suresh Hanswal who were the entities trading in the shares of the company. It was, therefore, alleged that the appellant, in connivance with Swastika, Pradesh and Suresh, entered into these fraudulent transactions which affected the price of the shares leading to market manipulation. 4. The appellant filed its reply to the show cause notice denying the charges and stating that Pradesh and Suresh have misused his name and account. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... efore, now proceed to dispose of the appeal after hearing learned counsel for the parties. 6. Learned counsel for the appellant has filed his written submissions challenging the procedure of adjudication followed by the Board and also alleging that the penalty of ` 8 lacs has been imposed on the appellant merely on the basis of conjectures and surmises. It has been further submitted that the findings arrived at by the adjudicating officer are without any evidence and are based on her ipse dixit. Learned counsel for the appellant has also submitted that the penalty is highly excessive and grossly disproportionate to the act allegedly done by the appellant. The requirements as laid down under Section 15J of the Act have not been given ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... would have filed FIR immediately when he came to know about the trades. Filing of FIR on March 10, 2011 is only an afterthought to cover up the default of the appellant. 8. After hearing learned counsel for the parties and perusing the material available on record, we are not inclined to interfere in the order passed by the adjudicating officer. We agree with learned counsel for the respondent Board that the alibi, that appellant does not understand English is not acceptable as he has given all his information in the KYC form in English and has also signed the said application form in English. His reply dated January 27, 2009 to the show cause notice is also in English where he has admitted the trades and claimed that they were enter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sidering the material available on record, the impugned order was passed. It, therefore, cannot not be said that the principles of natural justice were not followed. We are also not inclined to agree with learned counsel for the appellant that the order is based on conjectures and surmises. The adjudicating officer has given details of the transactions as well as the interconnection between the parties in the show cause notice as well as in the impugned order. In such transactions of manipulative trades, it is difficult, nay impossible, to find direct evidence. Findings in such cases are based on circumstantial evidence. We are fully satisfied that the adjudicating officer has placed sufficient material on record to conclude that the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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