Sebi bars entities, individuals from securities mkt for fraudulent trading

Sebi on Monday barred ten entities and four individuals from accessing the securities market for six months as they had indulged in fraudulent trading activities in the shares of Rutron International Ltd.

The entities and individuals (noticees) were found to have violated the provisions of Prohibition of Fraudulent and Unfair Trade Practices norms.

An investigation was conducted by the Securities and Exchange Board of India (Sebi) into the trading in the shares of Rutron International Ltd, currently known as Pazel International Ltd, for the May 3, 2012 to November 28, 2014 period.

During the probe, the regulator noted that the scrip was suspended for 12 years and that the suspension was revoked in July 2011.

Thereafter, trading in the scrip witnessed continuous rise from Rs 5.25 from May 3, 2012 and reached a level of Rs 269.70 on September 10, 2013, as per the regulator.

The company had not made any announcement during the relevant period to entice the investors to buy the scrip that too in off market transaction, when it was very much available on the exchange platform, Sebi said.

As per the regulator, the records thus reveal a strange coincidence in which some of the noticees bought shares in off market mode and started selling almost immediately thereafter in small quantities over a long period of time continuously chasing the pending buy orders.

Further, the watchdog observed that these noticees sold almost their entire stocks through their Last Traded Price (LTP) contributing trades, which clearly suggest that the shares were bought in off market with an intent to cause artificial rise in the price of the scrip through their manipulative trades in small quantities over a long period of time.

In this whole scheme of mutual trades amongst themselves, the noticees by trading amongst each other in the scrip of Rutron have acted in concert and in the process have contributed to the price rise in the scrip, Sebi noted.

Sebi, in another order passed on Monday, imposed a fine of Rs 5 lakh each on Manish Manubhai Raja and Girishkumar Prabhudas Ruparel for indulging in manipulative and fraudulent trading in the scrip of Atlanta Infrastructure and Finance Ltd.

Separately, the watchdog cancelled the registration of Fin Brains Securities (India) Ltd, as a stock broker for not complying with stock brokers regulation.

Fin Brains had been expelled from the membership of the National Stock Exchange (NSE) and Metropolitan Stock Exchange of India Ltd (MSEI) due to its mis-appropriation of client securities and funds towards own obligations, non-settlement of funds and securities due to clients, among others, as per an order passed on Monday.