January 06, 2006
SEBI suspends certificate of registration of M/s. Shailee Securities
Shri Madhukar, Whole Time Member, SEBI, has passed an order on December 27, 2005 against M/s. Shailee Securities, Sub-broker to M/s. Pramod Jain Securities Pvt. Ltd., Member, BSE, under Regulation 13(4) of SEBI (Procedure for Holding Enquiry by Enquiry Officer and Imposing Penalty) Regulations, 2002 directing that the certificate of registration of M/s. Shailee Securities, SEBI Regn. No. INS 010316714 be suspended for a period of Two Months in the matter of M/s. Morepen Hotels Ltd. (MHL).
SEBI had conducted an investigation into the dealings of MHL for the period from June 2000 to December 2000, wherein sudden spurt in the price and volume was observed. Investigations revealed that M/s. Shailee Securities had traded in the scrip on behalf of its client M/s. NN Investment. M/s. Shailee Securities had not collected any deposit towards initial margin from the client. Further trading done by Sub-broker was alleged to be in violation of SEBI (Prohibition of Fraudulent and Unfair Trade Practices relating to Securities Market) Regulations, 1995 and enquiry proceedings were initiated.
On receipt of the report from Enquiry Officer, Show Cause Notice was issued to M/s. Shailee Securities. After considering the submissions made by the sub-broker, it has been found that the sub-broker had failed to exercise due skill and care in terms of clause A (2) of the code of conduct prescribed for sub-brokers in schedule II in terms of Regulation 15 of SEBI (Stock Broker and Sub-broker) Regulations, 1992 which resulted in the client indulging in manipulative activities in violation of SEBI (Prohibition of Fraudulent and Unfair Trade Practices relating to Securities Market) Regulations, 1995. Thus, the Certificate of Registration of the sub-broker has been suspended for period of two months.
The order will come into force after the expiry of three weeks from the date of the order.
January 06, 2006