According to SEBI, the entity had colluded with the company’s directors and other brokers to execute cross trades for its clients that artificially raised the price of the scrip from Rs2 to Rs170.20 without any corresponding change in the fundamental of the company
Rajeev Kumar Agarwal, whole-time member of the Securities and Exchange Board of India (SEBI) has passed an 5th April 2013 suspending the registration certificate of stock broker M Bhiwaniwala & Company, belonging to the Calcutta Stock Exchange, for three months for its alleged role in fraudulent trading in shares of GR Industries and Finance.
After considering the facts and circumstances of the case, SEBI has suspended “certificate of registration of the noticee (M Bhiwaniwala & Co) for three months”, the regulator said in an order.
"The (suspension) order will come into force immediately on expiry of 21 days from the date of order,” the market regulator said.
SEBI had conducted investigation between 1 January 2004 and 28 February 2005 into the irregular trading in the scrip of GR Industries and Finance. According to SEBI, the entity had colluded with the directors of the company and other stock brokers and deliberately executed the cross trades for its clients that generated artificial volume and artificially raised the price of the scrip from Rs2 to Rs170.20 during the period without any corresponding change in the fundamental of the company.
“...the noticee had indulged in fraudulent and unfair dealings and had not taken due care and diligence in observance and compliance of the statutory requirement in conduct of its business as a stock broker,” the order said.
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