New Delhi: Capital market regulator Sebi has suspended the registration of stock broker Jayantilal Khandwala & Sons for a month because of fraudulent and unfair trade practices in shares of Rama Multi-Tech Ltd. (Agencies)
Sebi "...hereby suspend the certificate of registration of the noticee (Jayantilal Khandwala & Sons Pvt Ltd) as stock broker at BSE for a period of one month", the regulator said in an order.
Sebi found that the broker had committed fraudulent, manipulative and unfair activities and has also been negligent in observance and compliance of the statutory requirement in conduct of its business as a stock broker.
"The prohibited activities and types of irregularities as found in this matter have potential to disturb the market integrity and disturb the fair, equitable and efficient functioning of securities markets," Sebi said.
In its probe relating to trading of the shares of Rama Multi-Tech Ltd during June-September 2000, Sebi found that Jayantilal Khandwala & Sons traded in the scrip of the company on behalf of its clients who were common investors with more than one trading member.
Jayantilal Khandwala & Sons had common clients with another stock broker Khandwala Finance.
It was observed that the broker's purchases for its clients were very high, contributing to more than 70 percent purchases in some cases. During the investigation period, the broker had purchased 12.47 lakh shares and sold 17.18 lakh scrips of the company.
Further, the broker in dealing on behalf of its common clients with Khandwala Finance Ltd created false volume in the scrip and artificially increased the price of the shares.
New Delhi: Capital market regulator Sebi has suspended the registration of stock broker Jayantilal Khandwala & Sons for a month because of fraudulent and unfair trade practices in shares of Rama Multi-Tech Ltd.