SEBI in its order had slapped a fine to the tune of Rs4 lakh on Jani for circular trading in the scrip of Flawless Diamond during June 2006 to February 2007
Mumbai: The Securities Appellate Tribunal (SAT) has upheld charges of fraudulent and unfair stock market dealings against broker, Jagdish R Jani, but lowered the penalty imposed by Securities and Exchange Board of India (SEBI) to Rs2 lakh, reports PTI.
The SAT reduced the monetary penalty from Rs4 lakh to Rs2 lakh saying Jani's involvement during the investigation period between June 2006 and February 2007 did not lead to an "abnormally high" price in the scrip of Flawless Diamond (India) Ltd (FDIL).
"Taking into account the facts of the case and having regard to the role of the appellant (Jani) in the overall scheme of manipulation. We hold that a penalty of Rs2 lakh would meet the ends of justice. Accordingly, the penalty is reduced to Rs2 lakh and the appeal partly allowed," the Tribunal said.
The Tribunal further said, "…Appellant’s (Jani) contribution to the price rise was confined to only a portion of the investigation period and the price rise during that period was not abnormally high."
Market regulator SEBI in its order had slapped a fine to the tune of Rs4 lakh on Jani for circular trading in the scrip of Flawless Diamond (India) Ltd during the investigation period.
SEBI had found that Jani "created false and misleading appearance of trading by indulging in collusive activities with a few entities that traded in the scrip along with the appellant (him). During the investigation period, the price of the scrip registered an increase from Rs13.55 to Rs129.80."
While imposing a penalty for violation of regulations regarding fraudulent and unfair stock practices, SAT said it is necessary to take into account the volume of trades, period of trades and the extent of the violators' participation in the manipulation.
The SAT said the appellant had traded in 2.02 lakh shares translating to 3.52% of the total market volume during the investigation period and the circular transactions amounted to 1.51 lakh scrips.
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