Sebi fines five entities Rs 55 lakh for fraud trade

Markets regulator Sebi today slapped a fine totalling Rs 55 lakh on five entities for indulging in irregular trading in shares of CAT Technologies.

In an order, Sebi imposed a fine of Rs 25 lakh on Delight Financial Advisors, Rs 10 lakh each on Madanlal Bugaliya and Cherry Cosmetics, Rs 5 lakh each on Basmati Securities and Vinod Amratlal Naai for violating PFUTP (Prohibition of Fraudulent and Unfair Trade Practices) regulations.

The Securities and Exchange Board of India (Sebi) during the period from April 2010 to August 2011 examined the alleged violations by the entities regarding the irregular trading in shares of CAT Technologies.

After the probe, the market watchdog found that the five entities who were connected to each other had executed synchronised trades, reversal trades and self-trades, the regulator said.

Except Basmati Securities, all entities contributed to price rise in the scrip fraudulently by repeatedly placing buy orders with group entities at a price higher than LTP (Last Traded Price) and by manipulating the first trades of the day by placing buy orders at a price higher than LTP, regulator added.

The LTP is the price at which the most recent trade occurred.

The entities violated PFUTP regulations by indulging in such transactions Securities and Exchange Board of India (Sebi) said.

"Penalty imposed on the Noticees (5 entities)... shall commensurate with the violation committed and acts as a deterrent factor for the Noticees and others in protecting the interest of investors," concluded Sebi's Adjudicating officer, B J Dilip.

In the matter of Acclaim Industries, Sebi in a three separate orders imposed a total fine of Rs 11 lakh on a promoter and a director of the firm as well as on an individual for disclosure lapses regarding the change in their share holding in the company and thereby violated PIT (Prohibition of Insider Trading) norms.