Market regulator Sebi today freed brokerage firm India Infoline from charges of facilitating fictitious trading in the shares of GHCL, but reprimanded it for "lack of promptness" in cooperating in the probe.
In connection with a probe into a sharp rise in price and trading volume of GHCL shares between November 6, 2006 and March 31, 2007, Sebi conducted a probe in the role of brokers and their clients who traded in the stock.
"It was observed during the investigation that certain entities had indulged in synchronisation of deals/reveral trading/fictitious trading in the shares of GHCL in such a manner that led to creation of artificial volume and impacted the price of the scrip," the Sebi order said.
India Infoline was charged with executing sybchronised transactions in the GHCL shares for Jalco Financial Services (JFSPL) and Wilful Finance and Investment (WFIPL) and thus violating code of conduct of brokers.
"JFSPL and WFIPL entered into several synchronised trades, out of which 36 were transacted through the noticee. The noticee through these 36 synchronised transactions created a volume of 8,67,000 shares," it was alleged.
The probe, however, found that India Infoline "had merely acted as an agent for its clients and carried out the orders on the screen based trading mechanism of the exchange".
