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Capital markets regulator Sebi today imposed a total penalty of Rs 20 lakh on Angel Broking for alleged violations of stock broker norms and fraudulent dealings in shares of Sterling Green Woods.
Besides, the Securities and Exchange Board of India (Sebi) has imposed a penalty of Rs 10 lakh on Angel Infin, a client of Angel Broking, for violations of 'Prohibition of Fraudulent and Unfair Trade Practice (PFUTP)' regulations.
The penalties have been levied after the Sebi found that Angel Broking had assisted Angel Infin in placing "fictitious trades" by acting as broker and counter party broker to the self trades entered by the client and so failed to carry out its business as a broker with due diligence.
The Sebi, in its ruling today, stated that the orders placed by Angel Broking on behalf of Angel Infin "clearly demonstrate beyond reasonable doubt that the noticees (Angel Broking and Angel Infin) knowingly engaged in execution of self trades and attempted to manipulate the price of scrip of the company (Sterling Green Woods)".
The regulator said that both had violated the PFUTP rules while Angel Broking had also "failed to carry out its business with due skill, care and due diligence in violation of Regulation... Of code of conduct for stock brokers".
Accordingly, Sebi has imposed a "total penalty of Rs 20,00,000 (Rupees twenty lakh only) on ABL (Angel Broking Ltd) and Rs 10,00,000... On AIPL (Angel Infin Pvt Ltd) which will be commensurate with the violations committed by it".
The case relates to a Sebi probe into share trading of Sterling Green Woods for the period - November 6, 2009 to December 2, 2009.
It was observed that during the investigation period, the price of the scrip moved from Rs 19.80 to Rs 42.50 with an average daily volume of 69,776 shares.
As per the shareholding pattern of Sterling Green Woods, Angel Broking was holding more than 1% shares in the company as on September 30, 2009 while Angel Infin was found to be executing selftrades.
The market regulator found that Angel Infin, while trading through Angel Broking, executed self trades four times.
