SAT upholds Sebi order on Central Bank's equity dealer, wife

In Dec 2012, Sebi imposed a total penalty of Rs 25 lakh on one Jitendra Kumar Sharma and his wife Vibha Sharma for fraudulent trading practices

The Securities Appellate Tribunal (SAT) today upheld market regulator Sebi's penalty on a equity dealer of Central Bank of India and his wife for indulging in fraudulent trading of shares.

In December 2012, the market regulator had imposed a total penalty of Rs 25 lakh on one Jitendra Kumar Sharma and his wife Vibha Sharma for fraudulent trading practices.

Taking view that the couple had violated Sebi's norms and made undue gain of Rs 7.15 lakh, SAT said the charges against Jitendra and Vibha "have been sufficiently proved" and that "penalty of Rs 25 lakh on appellants to be paid jointly and severally is justified".

Securities and Exchange Board of India' (Sebi) probe into the trading activities of the couple from December 1, 2009 to March 31, 2010 found that Jitendra Sharma, an equity dealer for the Central Bank of India (CBI) used to place orders for the public sector bank with certain brokers. His wife Vibha also traded in the bank's shares.

It was found that the 'sell trades' of Vibha Sharma had matched 100% with that of the 'buy trades' of Central Bank of India.

Sebi observed that before placing the orders for the bank, shares were purchased in the account of Vibha Sharma and sold to match the orders of the bank. The couple thereby earned undue profits at the cost of Central Bank of India and its customers.