In the matter of Chandravadan J. Dalal
Case brief
What is this about?
The Tribunal upheld the suspension of M/s Chandravadan J. Dalal's registration for two years. It found that, despite claiming to act on client instructions, the member actively facilitated price manipulation and creation of artificial volumes for Ketan Parekh entities across multiple scrips through synchronized trading.
What did the court decide?
Suspension of certificate of registration of M/s Chandravadan J. Dalal for two years from the date of the order.
SECURITIES AND EXCHANGE BOARD OF INDIA
ORDER
ORDER UNDER REGULATION 13 (4) OF SEBI (PROCEDURE FOR HOLDING ENQUIRY BY ENQUIRY OFFICER AND IMPOSING PENALTY) REGULATIONS, 2002 AGAINST M/s CHANDRAVADAN J. DALAL, MEMBER, THE STOCK EXCHANGE, MUMBAI
MO/67/IVD/02/04
- Chandravadan J Dalal is registered with SEBI as a stock broker (hereinafter referred to as ‘the member’) bearing SEBI registration no. INB 010005111 and is a member of The Stock Exchange, Mumbai. Investigation was conducted against the member with respect to its dealing in scrips of Global Trust Bank (GTB), Aftek Infosys Ltd. (AFL), Shonk Technologies International Ltd. (Shonk) & Lupin Laboratories Ltd. (Lupin) and Ranbaxy Laboratories Ltd.
- Subsequently, SEBI vide order dated 03.10.2001 appointed an Enquiry Officer to enquire into the alleged violation of the following provisions by the member:
- (a) Provisions of SEBI (Stock Brokers and Sub Brokers) Regulations, 1992 and;
- (b) SEBI (Prohibition of Fraudulent and Unfair Trade Practices relating to Securities Market) Regulations, 1995
- The Enquiry Officer issued a show cause notice dated 26.11.2001 to the member enclosing the findings of investigation in respect of dealings in the scrip of GTB. A further show cause notice dated 02.04.2002 to the member in respect of the dealing in the scrips of Shonk and Lupin enclosing the findings of the investigation in this regard was issued by the Enquiry Officer. A show cause notice dated 17.02.2003 in respect of the member dealing in the scrip of Aftek for the periods 04.01.2001 to
Issues for consideration
3 issues framed by the court
Whether the stock broker Chandravadan J. Dalal aided and abetted Ketan Parekh entities in price manipulation of scrips GTB, Lupin, Shonkh, Aftek, and Ranbaxy.
Whether the synchronized trades and pattern of order placement by the member indicate manipulation rather than mere agency.
Whether a show cause notice recommending suspension of registration for two years was justified.
Parties & counsel
- appellant
Securities and Exchange Board of India
- appellant
M/s Chandravadan J. Dalal
Coram
A K Batra
Case details
As recorded by the court registry
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