Securities and Exchange Board of India- Ananta Barua, Whole Time Member, while agreeing with the Enquiry Report, restrained SIC Stocks and Services Pvt. Ltd. from accepting new clients for a period of three months and further warned Sidharth Handa and Gita Handa to ensure that all their future dealings in the securities market should be done strictly in accordance with law. Though the proceedings against Col. Rajinder Handa stood abated
In the pertinent case after the Enquiry Report in the show cause notice it was alleged that the Noticees had created false and artificial market in shares of Vertex Group Ltd. (VSL) during the investigation period by executing synchronised trades, self-trades, cross dealings as a stock broker for promoters/ directors and connected entities of VSL resulting in inflation of the price and volume of VSL and further made third party transfers of client funds, thereby indulging in fraudulent trade practices. It was further alleged that the Noticees failed to exercise due skill, care and diligence expected from stock-brokers. While in reply to the show cause notice (after many recalling attempts) the Noticees denied any such advice given to the clients and further submitted that there was an inordinate delay in initiation of the proceedings and the SCN has been issued after more than 8 years from the alleged violation and investigation. While it contended that any action at this stage would amount to ‘triple jeopardy’ amounting to judicial insubordination.
While agreeing to the Enquiry report and rejecting the submissions of the Noticees, considering the total penalty of Rs. 26,00,000 levied by the adjudicating authority appointed by SEBI, on the Noticees for the impugned transactions, the Tribunal restrained SIC Stocks and Services Pvt. Ltd. from accepting new clients for a period of three months and further warned Sidharth Handa and Gita Handa to ensure that all their future dealings in the securities market should be done strictly in accordance with law. Though the proceedings against Col. Rajinder Handa stood abated.[Vertex Spinning Ltd., In re, WTM/AB/EFD1/DRA4/20/2021-22, decided on 21-09-2021]
Agatha Shukla, Editorial Assistant has reported this brief.
