SAT upholds Sebi penalties on Big Broker, 2 others

In July last year, Sebi imposed Rs 7 lakh penalty each on Ashesh and Sanjeev, and Rs 8 lakh on Big Broker for carrying out fraudulent trades in shares of RCFL

The Securities Appellate Tribunal (SAT) today upheld market regulator Sebi's penalties on Ashesh Agarwal, Sanjeev Agarwal and Big Broker House Stock in a case related to fraudulent trade practices.

In July last year, Sebi had imposed Rs 7 lakh penalty each on Ashesh and Sanjeev, and Rs 8 lakh on Big Broker for carrying out fraudulent trades in shares of Rich Capital and Financial Services Ltd (RCFL).

The three approached SAT challenging the rulings of the Securities and Exchange Board of India.

However, SAT in its order said: "Conclusion regarding circular/reversal trades carried out by appellants (the three entities) cannot be faulted... We see no merit in all these appeals and the same are hereby dismissed with no order as to costs."

From March 27 to August 12, 2009, Sebi noticed that there was sharp rise in price and trading volumes of the RCFL scrip.

A Sebi probe found the scrip interalia traded at the BSE for 138 days opened at Rs 8.90 on March 27, 2009 and moved to a high of Rs 80.15 on August 12, 2009.

As per the findings, the three entities had created artificial volumes in RCFL's shares and manipulated its price in fraudulent and unfair trading, and the three entities were closely connected to RCFL .

As per Sebi, RCFL chairman Shashwat Agarwal is also a director of Big Broker. Sanjeev Agarwal is a promoter of Big Broker, while Ashesh Agarwal is the brother of Shashwat Agarwal.