Mumbai: Capital market regulator Sebi has slapped a total penalty of Rs 31 lakh on three individuals for allegedly indulging in fradulent trading activities in shares of four companies -- Riba Textiles, Supertex Industries, Aarey Drugs and Pharmaceuticals and Winsome Textile Industries.
The Securities and Exchange Board of India (Sebi) has imposed a penalty of Rs 15 lakh on one Shailesh Somabhai Patel, Rs 10 lakh on one Nitaben Shaileshbhai Patel and Rs 6 lakh on one Kapilaben Somabhai Patel. According to the regulator's order dated August 11, the three had in collusion with others "had executed circular trades, synchronised trades, reversal trades and self trades" in four company scrips which had resulted in creation of artificial volumes and price of the shares.
These activities were in violation of 'Sebi (Prohibition of Fraudulent and Unfair Trade Practices Relating to Securities Market) Regulations', Sebi said. "It can be observed from the order trade log that trades executed by the noticees were not of one instance but the transactions were repeatedly carried out over a period of time within the group," Sebi said. "It is pertinent to note that such trading patterns lead to price fluctuation and creates false appearance of trading in securities market and thereby tending to mislead the gullible investors," it added. Sebi had conducted an investigation into the trading in shares of the four companies for the period January 1, 2009 to August 31, 2009.
