Sebi slaps Rs 20 lakh fine on broker in Adani Export case

Market regulator Sebi has slapped a fine of Rs 20 lakh on S P J Stock Brokers for allegedly indulging in fraudulent trading in shares of erstwhile Adani Exports and violating stock brokers' norms.

A penalty of Rs 15 lakh for fraudulent trade practises in shares of Adani Exports and another Rs 5 lakh for violating regulations related to stock brokers have been imposed, a Sebi order said.

The matter relates to Sebi probe in the shares of Adani Exports (now known as Adani Enterprises) between July 2004 and January 2005 and August-September, 2005.

During these periods, shares had witnessed huge spurt in volumes as well as wide fluctuations in price, the order said.

Sebi (Securities and Exchange Board of India) had found that certain entities through collusion with brokers and other clients, transacted in the shares of Adani Exports in a manner that led to creation of artificial volumes in the scrip.

"... the noticee (S P J Stock Brokers) has deliberately entered into synchronised trading which has lead to artificial volume creation and misled the investors and has lead to wrongful gains to the noticee," Sebi said in its order dated February 8.

The regulator said that S P J Stock Brokers was one of the brokers who had traded substantially in the scrip of the company.

"The noticee has miserably failed in executing its duties (as a stock broker) and has participated in creation of artificial volume by executing synchronised trades," Sebi said.

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