SEBI Imposes Rs25 lakh Penalty on IIFL Securities
Moneylife Digital Team 04 August 2022
Securities and Exchange Board of India (SEBI) has imposed a penalty of Rs25 lakh on IIFL Securities for flouting regulatory norms in the matter related to ICICI General Lombard Insurance Company block deals back in 2019.
 
The market regulator conducted an investigation into the block deals executed by FAL Corporation Ltd in the scrip of ICICI General Lombard Insurance Co Ltd to check for any manipulation of reference price considered for execution of the block deal trades. This was for the April 2019 to September 2019 period.
 
During the investigation, SEBI found that IIFL Securities manipulated the reference price for the block deal window.
 
The trades executed by IIFL Securities on behalf of its client FAL were fraudulent and were carried out with the intention of manipulating the price of ICICI General Lombard Insurance shares for the purpose of influencing the volume weighted average price for the subsequent block deal transactions, the regulator said in an order.
 
Further, by carrying out the manipulative trades on behalf of FAL, IIFL Securities failed to ''demonstrate integrity and due care and diligence'' in respect of the transactions in the shares of ICICI General Lombard Insurance carried out by it on behalf of FAL, SEBI said. For the violations, SEBI  has imposed a fine of Rs25 lakh on IIFL Securities.
 
In a separate order, the regulator levied fines totalling Rs25 lakh on 14 entities for indulging in fraudulent practices in the preferential allotment of the shares of Jolly Plastic Industries Ltd (JPIL).
 
The order came after SEBI received references from BSE and conducted investigation in the matter of JPIL for suspected manipulation in trading in the company's shares by certain entities for the January 2012 to December 2013 period.
 
The regulator found that part of the subscription money paid by preferential allottees for the preferential allotment of JPIL was made by the company itself and its connected entities in collusion with each other, in violation of norms.
 
In another order, the markets watchdog slapped fines totalling Rs22 lakh on 11 entities in a case related to fraudulent practices in the preferential allotment of shares of Allied Computer International (Asia) Ltd.
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