Six entities have been fined a total of Rs 62 lakh by the Securities and Exchange Board of India (SEBI) for engaging in fraudulent trade practices related to North Eastern Carrying Corporation Ltd (NECC) shares. SEBI imposed a fine of Rs 15 lakh on Realstep Agencies, Rs 10 lakh each on Utkarsh Jain, Vanya Jain (NECC’s promoters), Sairabanu Mohd Rafiq Fanaswala, and Malatiben Ashokbhai Darji, and Rs 7 lakh on Charamsukh IT Marketing.
The SEBI investigation was conducted in NECC shares for the period from December 2016 to April 2017. It was found that Utkarsh, Vanya, Realstep, Fanaswala, Darji, and Charamsukh IT Marketing had violated the provisions of the Prohibition Of Fraudulent And Unfair Trade Practices (PFUTP) norms.
The investigation revealed that Utkarsh and Vanya sold shares and created a misleading appearance of trading in the market for the days on which such trading took place, bypassing the normal market mechanism. This had an adverse impact on genuine investors who traded in NECC shares.
According to SEBI, Charamsukh IT Marketing and Realstep were connected entities of Utkarsh and Vanya Jain who helped them offload their shares and exit the NECC shares by placing buy orders in sufficient quantities and matching their buy order rates. Realstep, Fanaswala, and Darji created artificial volume in NECC shares through execution of circular trades, contributing 14.06 per cent of the market volume in the scrip.
The entities have violated the provisions of PFUTP norms by engaging in such acts.
In a separate order, SEBI has prohibited RB Traders and its proprietor Raj Bhadur Bhdoriya from the securities markets for six months for engaging in unauthorized investment advisory services and imposed a penalty of Rs 8 lakh on them. They have also been asked to refund the money collected from investors in respect of such services.
SEBI found that they were involved in the activities of investment advisers without obtaining registration from SEBI, which is in violation of IA rules.
Investors must exercise caution while dealing in the stock market and only engage with registered investment advisers to ensure the safety of their investments.
The Securities and Exchange Board of India was constituted as a non-statutory body on April 12, 1988 through a resolution of the Government of India. The Securities and Exchange Board of India was established as a statutory body in the year 1992 and the provisions of the Securities and Exchange Board of India Act, 1992 (15 of 1992) came into force on January 30, 1992.
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