The three individuals -- Arvind Babulal Goyal, executive director and compliance officer of InCap Financial Services (IFSL), Abhay Javlekar and Ramesh Dwarkadas Daga -- indulged in synchronised trading among themselves, self-trades and reversal of trades that created artificial volumes in the company's shares.
Securities and Exchange board of India (Sebi) undertook a preliminary examination after it received a complaint stating declaration of dividend within a week by ISFL. The message was circulated by one Prem Agarwal on January 11, 2011.
Thus, they avoided a loss of about Rs 3.7 crore through such manipulative trading.
Whereas the price of the scrip is falling, it appears that three individuals accumulated the shares as a first step and secondly planted the false news, so that the price would increase as they could sell the shares post SMS, thus making profits, the regulator noted.
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However, as the price had not increased, these persons with a likely intent to avoid further loss, had sold the shares, it added.
Accordingly, it has impounded "the alleged unlawful gains of a sum of Rs 5.87 crore jointly and severally from persons/entities."
The market watchdog has ordered the three individuals "to provide, within seven days, a full inventory of all their assets and properties and details of all their banks accounts, demat accounts and holdings of shares/securities."
Besides, it has directed them not to dispose off their assets and properties till the amount are credited to an escrow account.