Sebi slaps Rs 2.10 cr fine on stock broker

Sebi today imposed a penalty of

Rs 2 crore on Jaypee Capital Services and its managing

director for indulging in manipulative practices in the

currency derivatives segment at the erstwhile United Stock

Exchange of India Ltd (USE).

The regulator has also slapped a fine of Rs 10 lakh for

violation of stock brokers regulations, according to a Sebi

order.

A probe conducted by Sebi had found that JCSL along with

its managing director Gaurav Arora had indulged in executing

large self trades with fraudulent intent to artificially raise

the volume in USD-INR contracts and to create misleading

appearance of trading in the currency derivatives segment at

USE during the inspection period between April and October,

2011.

Sebi in the order said that JCSL had contributed 72.83

per cent of USE's turnover between April and October, 2011 and

82.07 per cent of the turnover of the stock broker was

contributed by its self-trades.

The regulator also noted that 59.77 per cent of the total

of USE's turnover occurred mainly due to self trades of JCSL.

"The noticees (JCSL and Gaurav Arora) had indulged in

executing such large self-trades with an intent to

artificially raise the volume/turnover in USD-INR contracts

during the inspection period at USE.

"Undoubtedly, indulging into such voluminous self-trading

has certainly resulted into creation of misleading appearance

of trading in the currency derivatives segment at USE," Sebi

said.

The regulator also noted that JCSL had repeatedly

indulged into manipulative market practices for a long time

which were specifically prohibited under the securities laws

and had also failed to exercise due skill, care and diligence

in the conduct of its business as a stock broker.

Further, the regulator said that Arora was the main

person on behalf of JCSL and was also important link at USE

and therefore without his assistance or active involvement,

self-trading could not have been possible at all.

(This article has not been edited by Zeebiz editorial team and is auto-generated from an agency feed.)