Sebi imposes Rs 12 lakh fine on broker in BGSL case

Market regulator Sebi has slapped a fine of Rs 2100000 on a brokerage firm Action Financial Services (India) Limited for allegedly facilitating fraudulent trading practices in shares of Betala Global Securities Limited (BGSL) as well as violating stock broker norms.The Securities and Exchange Board of India (Sebi) said the stock broker indulged in synchronised and circular trades with other brokers and clients in the shares of Betala Global Securities which led to creation of artificial volumes and misleading appearance of trading in the company's stock price.The regulator, in an order dated May 16, has imposed a penalty of Rs 1500000 for not complying with PFUTP (Prohibition of Fraudulent and Unfair Trade Practices) Regulations and another Rs 600000 for violating brokers norm.In a probe conducted by Sebi, the regulator found a spurt in the share price of BGSL during May 2-November 21, 2003. The regulator said that the company's scrip price jumped from Rs 34.05 to Rs 120 and a total of 1.540000000 shares were traded.According to Sebi, a group of clients connected to each other i.e., Mahesh Mistry traded in the shares of the BGSL through various trading members and mostly through Action Financial Services (India) Limited and Jitendra Harjivandas Securities."...noticee (Action Financial Services (India) Limited aided and abetted the entities belonging to the Mahesh Mistry Grroup in employing manipulative and deceptive devices of trading such as circular and synchronised by providing a platform, of such trades which led to manipulation of price and creation of artificial demand for the scrip of the company as also a false appearance of trading in the scrip of the company," Sebi said.Besides, Sebi said "noticee as a stock broker has failed to show high standards of integrity, promptitude and fairness as well as failed to act with due skill, care and diligence in the conduct of the business."