Sebi suspends broker certificate of Swan for 3 months

Sebi has suspended broker, Swan Securities, for three months for alleged fraudulent dealings in scrip of several companies including Adani Enterprises, erstwhile Reliance Natural Resources and Godrej Industries while violating norms for stock brokers and other regulations.
The Securities and Exchange Board of India (Sebi) has found, among others, that Swan had executed "fictitious and manipulative trades on several occasions which had potential to disturb the fair, equitable and efficient functioning" of capital markets.
"...Hereby suspend the certificate of registration of the noticee, Swan Securities Pvt Ltd, a stock broker and member of NSE for a period of three months," Sebi said in an order today.

Swan had allegedly had executed self trades which were fictitious in nature in large volumes in shares of several companies which also include Essar Oil, Jayaswal Neco, Teledata Informatics, Asian Electronics and LML Ltd.
The market regulator said that Swan indulged in the trades to make profits by evading Securities Transaction Tax (STT) and stamp duty on the transactions. As per the probe by Sebi the broker has evaded Rs 3.22 lakh towards STT and stamp duty charges.
In this regard, Sebi has said that copy of its order against Swan shall also be forwarded to the concerned authorities for the purposes of "realisation of Rs 3,22,663.58 being the difference between the payable and actually paid STT and stamp duty from Swan Securities".

Among others, Sebi said that Swan had also acted as unregistered portfolio manager and contravened several provisions of the Sebi Act, stock brokers regulations, Sebi circulars, NSE Regulations and Bye-Laws while conducting its activities.
An investigation was ordered by Sebi against the broker after observing abnormal self-trading pattern in the scrip of Adani Enterprises during the period July 1, 2008 to November 30, 2008.