BEFORE THE ADJUDICATING OFFICER

SECURITIES AND EXCHANGE BOARD OF INDIA

[ADJUDICATION ORDER NO.AK/AO-56/2015]
___________________________________________________________________________
UNDER SECTION 15-I OF SECURITIES AND EXCHANGE BOARD OF INDIA ACT, 1992 READ WITH RULE 5
OF SEBI (PROCEDURE FOR HOLDING INQUIRY AND IMPOSING PENALTIES BY ADJUDICATING OFFICER)
RULES, 1995
In respect of
Mr. Prashant Kamble(PAN: AYYPK6664J)
___________________________________________________________________________
FACTS OF THE CASE
1. Securities and Exchange Board of India (hereinafter referred to as 'SEBI') conducted an investigation
with respect to the trading activities of Mr. PrashantKamble (hereinafter referred to as Noticee') for
the period from August 16, 2008 to June 30, 2010 (hereinafter referred to as the 'investigation
period). It was alleged that the Noticee indulged in 189 self-trades (i.e. same buy client as well as
the sale client for a given trade resulting in no change of beneficial ownership) while trading in 21
scrips on Bombay Stock Exchange Ltd (hereinafter referred to as BSE)during the investigation
period and created artificial volume in the scrip, leading to false and misleading appearance of
trading of the scrip in the securities market.

2. It was therefore alleged that the Noticee violated the provisions of Regulations 3(a), (b), (c) and (d),
4(1), 4(2)(a) and (g) of the SEBI (Prohibition of Fraudulent and Unfair Trade Practices Relating to
Securities Market) Regulations, 2003 (hereinafter referred to as the 'PFUTP Regulations'). The
alleged violations, if established, make the Noticee liable for monetary penalty under Section 15HA
ofSecurities and Exchange Board of India Act, 1992 (hereinafter referred to as SEBI Act).

APPOINTMENT OF ADJUDICATING OFFICER

3. The undersigned was appointed as the Adjudicating Officer vide order datedDecember 05, 2013
under Rule 3 of SEBI (Procedure for Holding Inquiry and Imposing Penalties by Adjudicating Officer)
Rules, 1995 (hereinafter referred to as 'Rules') read with sub-section (2) of Section 15 I of SEBI Act to
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inquire into and adjudge under Section 15HA of the SEBI Act, the alleged violations of the PFUTP
Regulations.

SHOW CAUSE NOTICE, REPLY AND PERSONAL HEARING

4. Show Cause Notice (hereinafter referred to as SCN) No. EAD-6/AK/RSL/35215/2014 dated
December 10, 2014was issued to Noticee under Rule 4 of the SEBIRules, 1995to show cause as to
why an inquiry should not be held and penalty be not imposed under section 15HA of SEBI Act on
the Noticee for the alleged violations as specified in the SCN.

5. In the interest of natural justice and in terms of rule 4(3) of the SEBI Rules, the Noticee was granted
an opportunity of personal hearing on February 13, 2015 vide hearing notice dated January 22,
2015. Since no submission was received from the Noticee to the SCN dated December 10, 2014, the
Noticee was given time till February 06, 2015 to make the submissions. The hearing notice was
affixed at the address of the Noticee at : A/201, Vakratund Apartment, LaxmibenChedda Marg,
Nallasopara West, Thane 401203, however, the Noticee failed to appear before the undersigned
on the date of the hearing and further no submissions to the SCN was received from the Noticee.

6. Another opportunity of personal hearing was granted to the Noticee on March 12, 2015 vide
hearing notice dated February 24, 2015(inadvertently dated January 24, 2015). The Noticee was yet
again advised to make the submission to the SCN dated December 10, 2014 before the date of the
personal hearing. The said hearing notice was also affixed at the address of the Noticee as stated
above.
7. Vide email dated March 04, 2015, Mr. Joby Mathew, Advocate, Authorized Representative
(hereinafter referred to as 'AR') on behalf of the Noticeeinter aliasubmitted that the Noticee did not
have any papers relating to the matter and since he was out of Mumbai,requested for another date
for personal hearing. The AR requested that a copy of the SCN and hearing notices issued to the
Noticee may be sent to the AR. The AR also sought time to file reply to the SCN.

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8. Vide email dated March 04, 2015, the AR was provided the following documents:
8.1 Scanned copy of the SCN dated December 10, 2014 with Annexure I and II along with the SCN
delivery acknowledgment card. (The AR was informed that the CD containing Annexure III may
be collected from the Head office, SEBI);
8.2 Scanned copy of the hearing Notice dated January 22, 2015 along with the Affixture report;
8.3 Scanned copy of the hearing notice dated February 24, 2015 (inadvertently dated January 24,
2015) along with the Affixture report.

9. It was further brought to the notice of the AR that the SCN and hearing notices had been duly
delivered/affixed at the Noticees address as observed from the acknowledgement report and
affixture report. The AR's request for time to file reply to the SCN was acceded to, and AR was
advised vide the aforesaid email to make the submissions by March 20, 2015. Further, the personal
hearing scheduled for March 16, 2015 was adjourned and the Noticee was granted another date for
hearing in the matter on March 24, 2015.

10. The Noticee vide letter dated March 23, 2015 inter aliasubmitted the following while denying the
allegations made against him:
i.

that he is a trader in securities and more specifically into jobbing activities to earn his livelihood.
That he has been buying and selling equity shares and future and options since several years. That
he does not usually takes delivery, but, squares off his open positions;

ii. that the objective of the trader / jobber is to trade in maximum number of shares (usually with a
thin spread) intraday.
iii. That a trader does not intend to take delivery of the shares and hence he is permitted by the stock
brokers to take positions based on margins provided by him. Consequently, the stock broker will
square off the open positions by the end of the day irrespective of the profit or loss and hence a
trader will square off his unexecuted / pending orders before the day end;
iv. That in illiquid scrip, it is quite possible that while squaring off the positions to avoid margin calls
or loss or delivery, the orders of a trader may match his own previous pending orders. It is
erroneous to allege that such trades were malafide, fraudulent and intended to create an artificial
volume;
v. That trading takes place on the anonymous and automated trading systems of the stock
exchanges where the identity of the counter party broker and client is not disclosed. Orders are
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placed by traders through the systems of the stock broker / member of the stock exchange. Some
of these systems display pending orders, but, some do not. Thus, when the Noticee places an
order, he is not sure whether his earlier orders were executed or not. In such a situation, it is
possible for his orders to match with his own earlier order; but, the same cannot be considered as
malafide;
vi. That he has never been found guilty of fraud or any malafide action by SEBI or any other person
except in a proceedings before SEBI under Section 11 and 11B of the SEBI Act, based on the very
same trades mentioned in the notice. In this regard, it has been stated that the Whole Time
Member(hereinafter referred to as WTM) of SEBI had passed directions against him in the very
same facts and based on the very same allegations contained in the notice and that the said
directions are in Order dated November 11, 2014. Aggrieved by the said order, he has preferred
an appeal before the Honble Securities Appellate Tribunal (SAT). That since the allegations and
findings are under challenge in the said appeal, and further since they are the same as in the
extant SCN, the present proceedings should be kept on hold till the appeal filed with SAT is
disposed of;
vii. With reference to para 1 of the SCN, the Noticeehas stated that he has not been provided with a
copy of complete investigation report, despite repeated requests for the same in the proceedings
under section 11 and 11B of SEBI Act, 1992. Further that though SEBI vide its letter dated March
7, 2014 has very categorically stated that the said investigation report is not a valid evidence
replied upon by them, it is trite law that an accused person has to be provided with all the
documents and records that were used to arrive at the allegations and findings against him. The
Noticee has again requested for a copy of investigation report;
viii. With reference to para 2 of the SCN, the Noticeehas denied that he had entered into any selftrades knowingly or withmalafide intention. Further, that on several days, the number of such
trades and the quantity of shares involved therein are insignificant, thus indicating that the trades
were nothing but coincidence;
ix. With reference to para 3 and 4 of the SCN, the Noticeehas submitted that the proportion of selftrades to the market trades is insignificant on most days, only on 4 out of 88 days has it been
significant, that the alleged self-trades were executed on 88 days (out of total of 678 days in the
investigation period i.e. less than 13%), that the impact of his said alleged self-trades on the
market volume or the price of the scrip has not been carried out, further that the proportion of
self-trades have been compared to his buy and sell order and not to market volumes;
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x. With reference to paragraph 5 of the SCN, the Noticeehas inter alia stated that the comparatively
lower number of shares in the self-trades (as compared to the order size) clearly shows that the
trades were not deliberately matched, self-trades occurred at around 3 pm and there was no
reason for any person to create volume in a scrip at 3 pm viz. close to day end;
xi. That artificial volume allegedly created by the Noticees trades were insignificant, when compared
to the total volume of the scrip traded in the market on that day;
xii. That since the trades were of 2008 to 2010, the Noticee was unable to recollect the correct
sequence of placing orders or their execution or the reason for the same, however, it is quite
possible that the self-trades occurred because the dealer of the stock broker may have placed the
buy order without realizing the pending sell order or vice versa;
xiii. That the Noticeemade a loss of Rs.53.09 lacs during the investigation period while trading in 37
scrips. Further that his trades on National Stock Exchange of India Ltd. (hereinafter referred to as
NSE) (during the period August 16, 2009 to September 2009) were not very significant and that
he made a loss of Rs.8,520 while trading in 16 scrips. Also that the percentage of his trades in 8
scrips to the market volume is less than 1% and that he made a loss of Rs.30,747/-;
xiv. That matching of his own buy and sell orders were only a coincidence and was unknown to him at
the time of trades were executed;
xv. That In absence of complete trade and order log of the BSE and NSE, it is erroneous to conclude
that his trades were deliberately matched with each other;
xvi. That the investigation period stretches over almost two years, furthermore, he has done
thousands of trades in 89 scrips during the said period. However, only 189 trades in 21 scrips are
alleged as self-trades. This clearly shows that the said alleged self-trades are nothing, but
coincidence and on account of the automatic and anonymous order matching system of BSE and
NSE, hence, the allegation that the Noticee executed self-trades to provide false and misleading
appearance of trading is baseless, erroneous and false;
xvii. With reference to para 7 to 9 of the SCN, the Noticeehas inter alia reiterated and denied that he
deliberately and knowingly executed self-trades or that he created artificial volumes meant to
distort market equilibrium and has stated that the trades were in the nature of jobbing or day to
day trading wherein delivery is avoided to extent possible. The Noticee has stated that such trades
are recognized, legal and permitted by BSE and NSE, therefore, it is erroneous to draw a
presumption that his trades were not intended to result in change of beneficial ownership merely
because his orders matched against each other and / or because no delivery was taken by him;
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xviii. That there is no evidence of any disproportionate gain or unfair advantage and there is no
documentary evidence of any loss suffered by any investor or group of investors due to the
alleged self trades.
11. Mr. Joby Mathew and Ms. Pretti Bhardwaj, Authorised Representatives (hereinafter referred to as
ARs) appeared on behalf of the Noticeeon March 24, 2015 and inter aliareiterated the submissions
made vide letter dated March 23, 2015. As regards the submission made by the Noticee vide letter
dated March 23, 2015 regarding not providing a copy of the complete investigation report,it was
inter aliabrought to the notice of the ARs that the relevant portion of the Investigation Report
against which the allegations have been framed against the Noticee have already been provided in
the SCN.
12. The ARs were further also informed that the soft copy of the integrated trade and order log and the
order log of the 21 scrips on the dates where the Noticee was alleged to have executed self trades
was provided to the Noticee as Annexure III along with the SCN and that the same was delivered at
the address of the Noticee. Copy of the said Annexure III was once again provided to the ARs in a CD
at the time of the hearing. The ARs sought to make further submission based on the data provided
in the CD by April 10, 2015.

13. As regards the submissions made vide letter dated March 23, 2015 that the Noticee had made a loss
of Rs. 53.09 lacs during the investigation period while trading in 37 scrips, it was pointed out to the
ARs that in absence of any analysis supporting the said submission, it was not clear as to loss
pertained to which 37 scripsand also as to how the said loss was arrived at.

14. The ARs submitted that there was no past non-compliance by the Noticee with respect to SEBI Act
and Regulations framed thereunder and no action has been taken by SEBI in the past against the
Noticee, except Order by WTM of SEBI dated November 11, 2014 in the same matter. The
ARsfurther stated that in case the Noticee intends to make an application for settlement
proceedings, the copy of the application for settlement would be filed by April 10, 2015 and the
copy thereof would be submitted along with the written submission by April 10, 2015.

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15. Since no submissions were received from the ARs in the matter tillApril 20, 2015, the ARs were
advised to make the submission by April 21, 2015. Vide letter April 21, 2015, the ARs inter aliamade
the following submissions on behalf of the Noticee:
15.1

That due to reasons beyond control, including difficulty in obtaining records from the stock
brokers,the Noticee was unable to submit his additional written submission by April 10,
2015;

15.2

That amongst the alleged self-trades set out in the SCN and the annexures thereto, there
were several instances which were transfer of positions from one stock broker to another. As
a trader, the Noticee would be given exposure limits by stock brokers, usually, for a period of
5 days. At the end of said tenure,the Noticee was required to either square off his positions
or to take delivery. In the instances set out in the SCN, the Noticee did not wish to take
delivery, since he did not have sufficient funds to do so; but he did not wish to square off too
because he would have incurred a loss. Therefore, the Noticee sought exposure limits from
other brokers who granted him the same. In order to transfer the positions from the existing
stock brokers to a new one, the Noticee placed counterparty orders (to his existing positions)
through the new stock brokers and thus transferred the positions. It was stated that the
Noticee required 15 days time to obtain corroborating documents and records from his stock
brokers to substantiate his submission;

15.3

With regard to loss of Rs.53.09 crore, it was stated that the same is recorded in the Annexure
to the show cause notice dated January 10,2014 issued by SEBI under Sections 11 and 11B of
the SEBI Act;

15.4

that the Noticee was not filing an application for settlement;

15.5

that the Noticee be given a further time of 15 days to collect, obtain and submit
corroborating documents and records from his stock brokers to substantiate his submissions
and another opportunity of hearing to clarify the matter.

16. In view of the same, vide email dated April 21, 2015, the Noticee was given time till May 05, 2015 to
make his submissions and another opportunity of personal hearingon May 12, 2015. The ARs of the
Noticee vide email dated April 21, 2015 sought adjournment of the personal hearing to May 26,
2015 and the same was acceded to vide email of the same date.

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17. During the personal hearing on May 26, 2015 the ARs, Mr. Joby Mathew and Mr. Shantibhushan
Nirmal appeared on behalf of the Noticee and reiterated the submissions / claims made vide letter
dated April 21, 2015. The ARs during the hearing also admitted that the Noticee knowingly traded in
a manner that would cause self-trades in order to transfer his positions from the existing stock
broker to new one. The ARs further claimed that the Noticee was given exposure limits by stock
brokers usually for a period of five days and that at the end of the tenure; the Noticee was required
to square off his position or take delivery. In the instances set out in the SCN, the ARs claimed that
the Noticee did not want to take delivery, since he did not have sufficient funds to do so. Also, the
Noticee did not wish to square off, because he would have incurred loss. Therefore, the ARs claimed
that the Noticee transferred his positions from existing stock broker to new one by placing counter
party orders. It was brought to the notice of the ARs at the hearing that the claim made through
written submissions dated April 21, 2015 and at the hearing was not supported by any documentary
proof.The ARs thereafter confirmed that all submissions in the matter had been made.

CONSIDERATION OF ISSUES
18. I have carefully perused the written submissions wherever submitted by the Noticee, the
submissions put forth by the ARs on behalf of the Noticee during the hearing and the documents
available on record. The allegation against the Noticee is that the Noticee entered into 189 selftrades in 21 scrips during the investigation period, therebythe Noticee created artificial volume in
the scrip, leading to false and misleading appearance of trading in the underlying scrips in the
securities market, thereby violating Regulation 3 (a), (b), (c) and (d), 4 (1), 4 (2) (a) and (g) of the
PFUTP Regulations.

19. Before moving forward, it will be appropriate to refer to the relevant provisions ofthe SEBI PFUTP
Regulations, which reads as under:
PROHIBITION OF FRAUDULENT AND UNFAIR TRADE PRACTICES RELATING TO THE SECURITIES
MARKET
3. Prohibition of certain dealings in securities
No person shall directly or indirectly
(a) buy, sell or otherwise deal in securities in a fraudulent manner;
(b) use or employ, in connection with issue, purchase or sale of any security listed or proposed to be
listed in a recognized stock exchange, any manipulative or deceptive device or contrivance in
contravention of the provisions of the Act or the rules or the regulations made there under;
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(c) employ any device, scheme or artifice to defraud in connection with dealing in or issue of
securities which are listed or proposed to be listed on a recognized stock exchange;
(d) engage in any act, practice, course of business which operates or would operate as fraud or
deceit upon any person in connection with any dealing in or issue of securities which are listed or
proposed to be listed on a recognized stock exchange in contravention of the provisions of the Act or
the rules and the regulations made there under.
4. Prohibition of manipulative, fraudulent and unfair trade practices
(1) Without prejudice to the provisions of regulation 3, no person shall indulge in a fraudulent or an
unfair trade practice in securities.
(2) Dealing in securities shall be deemed to be a fraudulent or an unfair trade practice if it involves
fraud and may include all or any of the following, namely:
(a) indulging in an act which creates false or misleading appearance of trading in the securities
market;
(b)...
(c)...
(d)...
(e)...
(f)....
(g) entering into a transaction in securities without intention of performing it or without intention of
change of ownership of such security;
20. The issues that, therefore, arise for consideration in the present case are :
20.1

Whether the Noticee entered into self-trades in 21 scrips during the investigation period
thereby causing artificial volumes in the said scrips, leading to false and misleading
appearance of trading in the underlying scrips?

20.2

Whether Noticee has thereby violated the provisions of the Regulation 3 (a), (b), (c) and (d),
4 (1), 4 (2) (a) and (g) of the PFUTP Regulation during the investigation period?

20.3

Does the violation, if any, attract monetary penalty under Section 15 HA of SEBI Act?

20.4

If so, what would be the monetary penalty that can be imposed taking into consideration
the factors mentioned in Section 15J of SEBI Act?

FINDINGS
21. Before going to the facts of the matter, I would like to address the contention of the Noticee that
they had not been provided with a copy of the complete investigation report. In the matter, I note
that the Honble Securities Appellate Tribunal (hereinafter referred to as SAT) in the case of
MayroseCapfin Private Limited V/s. Securities and Exchange Board of India (Appeal No. 20 of
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2012) dated 30.03.2012 has observed as follows: The principles of natural justice require that the
inquiry officer should make available such document and material to the delinquent on which
reliance is being placed in the inquiry. It is not necessary for the inquiry officer to make available all
the material that might have been collected during the course of investigation, but, has not been
relied upon for proving charge against the delinquent. No prejudice can, therefore, be said to have
been caused to the appellant on this count. A copy of the said Order of the Honble SAT was
provided to the ARs at the time of hearing. Further, the relevant portions of the Investigation Report
against which the allegations have been framed against the Noticee have already been provided in
the SCN.

22. Further with regard to the request of the Noticee that the present proceedings be kept on hold until
the appeal filed with the Honble SAT against the WTM Order dated November 11, 2014 is disposed
of, it was informed to the ARs at the hearing that in the absence of any stay order from the Honble
SAT in the matter, the adjudication proceedings would continue in the extant matter.

23. With this in place, I now proceed with thefindings in connection with the role of Noticee on the
violations as alleged in thecase. I note that the Noticeeindulged in 189 self-trades (i.e. same buy
client as well as the sale client for a given trade resulting in no change of beneficial ownership) in 21
scrips. The details of the same areas hereunder:

Sr. no.

Scrip name

Self Trade Qty.

No. of Self Trades

M/s. Crystal Software Solutions Ltd.

15,190

M/s. Sanguine Media Ltd.

10,769

31

M/s. Jumbo Bag Ltd.

8,215

13

M/s. Gandhinagar Hotels Ltd

15,473

31

M/s. G.S. Auto International Ltd.,

12,403

29

M/s. SKS Logistics Ltd

8,741

31

M/s. GokulRefoils and Solvent Limited

650

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Sr. no.

Scrip name

Self Trade Qty.

No. of Self Trades

M/s. SoftechInfinium Solutions Limited

1,200

M/s. Kanani Industries Ltd

1,016

10

M/s. Arihant Capital Markets Ltd.

911

11

M/s. Marg Ltd

289

12

M/s. Gujarat metallic Coal & Coke Ltd.

459

19

13

M/s. Syncom Formulations (I) Ltd.

187

14

M/s. Interworld Digital Ltd.

95

80

15
M/s. Panchsheel Organic Ltd.
16

M/s. Indiaco Ventures Ltd.

11

17

M/s. Meuse Kara &Sungrace Mafatlal Ltd.

10

18

M/s. SwastiVinayaka Synthetics Ltd.

10

19

M/s. Shalibhadra Finance Ltd.

10

20

M/s. Beckons Industries Ltd.

21

M/s. Sacheta Metals Ltd.

75,725

189

Total

24. The details of the trade containing the above self-trades entered by the Noticee was provided to the
Noticee along with the SCN.The day-wise,scrip-wise analysis ofNoticee's self-trades in the 21 scrips
as compared to (a) total market volume on BSE during the day on which self trade had occurred; (b)
total buy volume of the Noticee during the day on which self trade had occurred; and (c) total sell
volume of the Noticee during the day on which self trade had occurred; is as given hereunder:

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Trade date

Total market
vol. during
the day in BSE
(A)

26/12/2008
30/12/2008

23,751
43,709

Trade date

02/01/2009
06/01/2009
09/01/2009
22/01/2009
23/01/2009
Trade date

14/11/2008
16/12/2008
31/12/2008
22/01/2009
Trade date

13/05/2010
01/06/2010
03/06/2010
07/06/2010
08/06/2010
14/06/2010
16/06/2010
23/06/2010
30/06/2010

Total market
vol during the
day in BSE
(A)
2,04,342
63,502
1,93,439
61,957
2,38,060
Total market
vol during the
day in BSE
(A)
20,833
11,490
22,934
7,343
Total market
vol. during
the day in BSE
(A)
5,869
42,078
17,443
36,097
55,970
53,018
64,627
58,680
44,338

M/s. Crystal Software Solutions

Total buy
Total sell
Self
vol of
vol of
Tradevol of
the
the
the Noticee
Noticee
Noticee
(D)
(B)
(C)
14,000
7,604
7,149
9,000
11,545
8,041
M/s. Sanguine Media Ltd.
Total buy
Total sell
Self Trade
vol of
vol of
vol of
the
the
the Noticee
Noticee
Noticee
(D)
(B)
(C)
63,381
50,000
25
9,376
56,000
7,715
3,471
1,00,000
50
30,195
4,731
2,964
75,070
64,580
15
M/s. Jumbo Bag Ltd.
Total buy
Total sell
Self-Trade
vol of
vol of
vol of
the
the
the Noticee
Noticee
Noticee
(D)
(B)
(C)
5,182
4,907
165
3,844
3,000
50
17,787
9,089
7,447
4,161
1,053
553
M/s. Gandhinagar Hotels Ltd.
Total buy
Total sell
Self
vol. of
vol of
Tradevol of
the
the
the Noticee
Noticee
Noticee
(D)
(B)
(C)
415
150
50
21,465
17,630
13,425
9,832
4,800
70
10,238
10,671
7
4,709
34,302
23
9,421
24,544
80
34,048
6,028
2
10,588
24,101
567
7,095
10,876
1,249

% of (D)
to (A)

% of (D)
to (B)

% of (D)
to (C)

30.10
18.40

51.06
89.34

94.02
69.65

% of (D)
to (A)

% of (D)
to (B)

% of (D)
to (C)

0.01
12.15
0.03
4.78
0.01

0.04
82.28
1.44
9.82
0.02

0.05
13.78
0.05
62.65
0.02

% of (D)
to (A)

% of (D)
to (B)

% of (D)
to (C)

0.79
0.44
32.47
7.53

3.18
1.30
41.87
13.29

3.36
1.67
81.93
52.52

% of (D)
to (A)

% of (D)
to (B)

% of (D)
to (C)

0.85
31.91
0.40
0.02
0.04
0.15
0.00
0.97
2.82

12.05
62.54
0.71
0.07
0.49
0.85
0.01
5.36
17.60

33.33
76.15
1.46
0.07
0.07
0.33
0.03
2.35
11.48

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Trade date

01/02/2010
09/02/2010
11/02/2010
17/02/2010
18/02/2010
19/02/2010
04/03/2010
05/03/2010
09/03/2010
12/03/2010
22/03/2010
26/03/2010
29/03/2010
01/04/2010
05/04/2010
06/04/2010
08/04/2010
12/04/2010
19/04/2010
Trade date

11/05/2010
12/05/2010
25/05/2010
26/05/2010
31/05/2010
09/06/2010
10/06/2010
14/06/2010
15/06/2010
16/06/2010
22/06/2010

Total market
vol during the
day in BSE
(A)
1,10,283
4,71,530
2,13,515
8,11,691
5,01,516
7,19,013
1,57,008
2,06,622
2,39,049
2,09,935
2,79,580
3,33,443
3,20,621
5,03,929
5,24,167
3,41,465
1,98,042
2,21,069
1,91,336
Total market
vol during the
day in BSE
(A)
64,536
92,831
1,71,129
1,25,244
1,06,063
1,17,688
1,69,545
1,44,779
1,80,683
1,42,172
1,85,223

M/s. GS Auto International Ltd.

Total buy
Total sell
Self
vol of
vol of
Tradevol of
the
the
the Noticee
Noticee
Noticee
(D)
(B)
(C)
8,633
8,628
25
42,273
37,254
65
10,072
25,796
4
1,04,852
1,04,640
25
1,23,593
53,446
5
1,28,487
1,05,650
23
6,203
23,021
5
7,313
32,788
1
17,238
24,567
40
23,905
19,019
25
77,010
25
25
40,480
26,035
11,880
1,36,827
16,566
25
18,950
1,09,948
13
27,171
77,792
125
9,460
29,982
51
35,319
11,804
15
17,807
28,641
40
28,366
33,182
11
M/s. SKS Logistics Ltd.
Total buy
Total sell
Self
vol of
vol of
Tradevol of
the
the
the Noticee
Noticee
Noticee
(D)
(B)
(C)
15,754
25,434
4,450
57,154
2,691
1,976
57,747
56,781
50
27,738
27,369
100
26,817
28,217
574
88
54,810
3
4,570
4,558
12
57,380
14,037
6
48,438
49,766
156
43,924
70,897
55
44,759
43,040
925

% of (D)
to (A)

% of (D)
to (B)

% of (D)
to (C)

0.02
0.01
0.00
0.00
0.00
0.00
0.00
0.00
0.02
0.01
0.01
3.56
0.01
0.00
0.02
0.01
0.01
0.02
0.01

0.29
0.15
0.04
0.02
0.00
0.02
0.08
0.01
0.23
0.10
0.03
29.35
0.02
0.07
0.46
0.54
0.04
0.22
0.04

0.29
0.17
0.02
0.02
0.01
0.02
0.02
0.00
0.16
0.13
100.00
45.63
0.15
0.01
0.16
0.17
0.13
0.14
0.03

% of (D)
to (A)

% of (D)
to (B)

% of (D)
to (C)

6.90
2.13
0.03
0.08
0.54
0.00
0.01
0.00
0.09
0.04
0.50

28.25
3.46
0.09
0.36
2.14
3.41
0.26
0.01
0.32
0.13
2.07

17.50
73.43
0.09
0.37
2.03
0.01
0.26
0.04
0.31
0.08
2.15

_____________________________________________________________________________________________
Adjudication order in respect of Mr. PrashantKamble
Page 13 of 29

23/06/2010
25/06/2010
28/06/2010
29/06/2010
30/06/2010
Trade date

11/12/2008
Trade date

10/03/2010
19/03/2010
07/04/2010
15/04/2010
Trade date

27/04/2010
29/04/2010
30/04/2010
06/05/2010
Trade date

28/06/2010

887
64,507
1,58,614
4,20,579
1,68,527
Total market
vol during the
day in BSE
(A)
4,148
Total market
vol during the
day in BSE
(A)
20,600
23,000
18,600
39,400
Total market
vol during the
day in BSE
(A)
24,131
38,042
22,877
46,135
Total market
vol during the
day in BSE
(A)
1,36,266

M/s. SKS Logistics Ltd. (contd.)

6,536
5,773
25
10,964
5,425
35
35,276
47,293
14
88,860
63,970
355
17,693
42,812
5
M/s. GokulRefoils& Solvent Ltd.
Total buy
Total sell
Self
vol of
vol of
Tradevol of
the
the
the Noticee
Noticee
Noticee
(D)
(B)
(C)
1,375
1,375
650
M/s. SoftechInfinium Solutions Ltd.
Total buy
Total sell
Self
vol of
vol of
Tradevol of
the
the
the Noticee
Noticee
Noticee
(D)
(B)
(C)
8,200
8,500
100
2,900
3,200
100
2,900
900
100
3,900
13,000
100
M/s. Kanani Industries Ltd.
Total buy
Total sell
Self
vol of
vol of
Tradevol of
the
the
the Noticee
Noticee
Noticee
(D)
(B)
(C)
1,054
1,688
5
9,987
555
8
12,211
1,424
3
1,024
19,374
1,000
M/s. Arihant Capital Markets Ltd.
Total buy
Total sell
Self
vol of
vol of
Tradevol of
the
the
the Noticee
Noticee
Noticee
(D)
(B)
(C)
12,131
12,515
911

2.82
0.05
0.01
0.08
0.00

0.38
0.32
0.04
0.40
0.03

0.43
0.65
0.03
0.55
0.01

% of (D)
to (A)

% of (D)
to (B)

% of (D)
to (C)

15.67

47.27

47.27

% of (D)
to (A)

% of (D)
to (B)

% of (D)
to (C)

0.49
0.43
0.54
0.25

1.22
3.45
3.45
2.56

1.18
3.13
11.11
0.77

% of (D)
to (A)

% of (D)
to (B)

% of (D)
to (C)

0.02
0.02
0.01
2.17

0.47
0.08
0.02
97.66

0.30
1.44
0.21
5.16

% of (D)
to (A)

% of (D)
to (B)

% of (D)
to (C)

0.67

7.51

7.28

_____________________________________________________________________________________________
Adjudication order in respect of Mr. PrashantKamble
Page 14 of 29

Trade date

31/12/2008
Trade date

31/05/2010
Trade date

04/03/2010
07/04/2010
Trade date

04/03/2010
Trade date

16/12/2008
01/01/2009
02/01/2009
Trade date

12/04/2010

Total market
vol during the
day in BSE
(A)
40,790
Total market
vol during the
day in BSE
(A)
1,88,175
Total market
vol during the
day in BSE
(A)
3,85,187
4,41,026
Total market
vol during the
day in BSE
(A)
2,25,809
Total market
vol during the
day in BSE
(A)
66
3
14
Total market
vol during the
day in BSE
(A)
3,13,719

M/s. Marg Ltd.

Total buy
Total sell
Self
vol of
vol of
Tradevol of
the
the
the Noticee
Noticee
Noticee
(D)
(B)
(C)
5,000
5,098
289
M/s. Syncom Formulations (India) Ltd.
Total buy
Total sell
Self
vol of
vol of
Tradevol of
the
the
the Noticee
Noticee
Noticee
(D)
(B)
(C)
7,655
7,655
187
M/s. Interworld Digital Ltd.
Total buy
Total sell
Self Trade
vol of
vol of
vol of
the
the
the Noticee
Noticee
Noticee
(D)
(B)
(C)
73,980
85,865
60
4,815
93,152
35
M/s. Panchsheel Organics Ltd.
Total buy
Total sell
Self
vol of
vol of
Tradevol of
the
the
the Noticee
Noticee
Noticee
(D)
(B)
(C)
31,592
15,677
80
M/s. Indiaco Ventures Ltd.
Total buy
Total sell
Self
vol of
vol of
Tradevol of
the
the
the Noticee
Noticee
Noticee
(D)
(B)
(C)
50
20
4
3
2
2
6
10
5
M/s. SwastiVinayaka Synthetics Ltd.
Total buy
Total sell
Self
vol of
vol of
Tradevol of
the
the
the Noticee
Noticee
Noticee
(D)
(B)
(C)
57,652
50,983
10

% of (D)
to (A)

% of (D)
to (B)

% of (D)
to (C)

0.71

5.78

5.67

% of (D)
to (A)

% of (D)
to (B)

% of (D)
to (C)

0.10

2.44

2.44

% of (D)
to (A)

% of (D)
to (B)

% of (D)
to (C)

0.02
0.01

0.08
0.73

0.07
0.04

% of (D)
to (A)

% of (D)
to (B)

% of (D)
to (C)

0.04

0.25

0.51

% of (D)
to (A)

% of (D)
to (B)

% of (D)
to (C)

6.06
66.67
35.71

8.00
66.67
83.33

20.00
100.00
50.00

% of (D)
to (A)

% of (D)
to (B)

% of (D)
to (C)

0.00

0.02

0.02

_____________________________________________________________________________________________
Adjudication order in respect of Mr. PrashantKamble
Page 15 of 29

M/s. Shalibhadra Finance Ltd.

Trade date
Total market
Total buy
Total sell
Self Trade % of (D) % of (D) % of (D)
vol during the
vol of
vol of
vol of
to (A)
to (B)
to (C)
day in BSE
the
the
the Noticee
(A)
Noticee
Noticee
(D)
(B)
(C)
16/04/2010
1,74,613
285
8,355
10
0.01
3.51
0.12
M/s. Beckons Industries Ltd.
Trade date
Total market
Total buy
Total sell
Self
% of (D) % of (D) % of (D)
vol during the
vol of
vol of
Tradevol of to (A)
to (B)
to (C)
day in BSE
the
the
the Noticee
(A)
Noticee
Noticee
(D)
(B)
(C)
39,466
3,999
6,655
5
0.01
0.13
0.08
22/02/2010
M/s. Sacheta Metals Ltd.
Trade date
Total market
Total buy
Total sell
Self
% of (D) % of (D) % of (D)
vol during the
vol of
vol of
Tradevol of to (A)
to (B)
to (C)
day in BSE
the
the
the Noticee
(A)
Noticee
Noticee
(D)
(B)
(C)
5,173
642
1
1
0.02
0.16
100.00
28/06/2010
M/s. Gujarat Metallic Coal and Coke Ltd (Previously known as M/s. Arvind Chemicals Pvt. Ltd.)
Trade date
Total market
Total buy
Total sell
Self
% of (D) % of (D) % of (D)
vol during the
vol of
vol of
Tradevol of to (A)
to (B)
to (C)
day in BSE
the
the
the Noticee
(A)
Noticee
Noticee
(D)
(B)
(C)
2,65,034
46,622
36,889
17
0.01
0.04
0.05
10/12/2009
2,61,206
6,079
15,932
2
0.00
0.03
0.01
11/12/2009
7,07,573
27,194
27,189
9
0.00
0.03
0.03
18/12/2009
9,82,514
14,721
14,721
353
0.04
2.40
2.40
23/12/2009
8,66,177
3,970
3,941
15
0.00
0.38
0.38
24/12/2009
8,88,855
32,82
4,093
3
0.00
0.09
0.07
30/12/2009
7,99,163
34,010
33,997
25
0.00
0.07
0.07
31/12/2009
12,19,873
55,245
54,843
10
0.00
0.02
0.02
13/01/2010
6,58,230
35,934
35,904
5
0.00
0.01
0.01
19/01/2010
5,00,955
96,952
68,526
20
0.00
0.02
0.03
25/01/2010
M/s. Meuse Kara &Sungrace Mafatlal Ltd (Previously known as M/s. Bio Green Industries Ltd.)
Trade date
Total market
Total buy
Total sell
Self
% of (D) % of (D) % of (D)
vol during the
vol of
vol of
Tradevol of to (A)
to (B)
to (C)
day in BSE
the
the
the Noticee
(A)
Noticee
Noticee
(D)
(B)
(C)
7,740
35
3,510
10
0.13
28.57
0.28
01/04/2009
_____________________________________________________________________________________________
Adjudication order in respect of Mr. PrashantKamble
Page 16 of 29

25. In the matter, I note that the Noticee has stated that though the investigation period covers almost
two years and that the Noticee has done thousands of trades in 89 scrips during the said period,
only 189 trades in 21 scrips are alleged as self-trades. Also that the proportion of self-trades to the
market trades is insignificant on most days, only on 4 out of 88 days has it been significant, and that
the alleged self-trades were executed on 88 days out of a total of 678 days in the investigation
period i.e. less than 13%. In the matter, it becomes necessary to quote the order of Hon'ble
Securities and Appellate Tribunal (SAT) in ChiragTanna vs. the Adjudicating Officer dated June 16,
2011 wherein SAT had held as follows:
"..we have on record the trade and order logs from which it has been pointed out by the learned
counsel for the respondent Board that the appellant had executed self trades i.e. trades in which he
was both the buyer and seller. Such trades are, admittedly, fictitious and create artificial volumes in
the traded scrip."

26. Considering each scrip and trade date separately (though trade dates when self-trades were
executed by the Noticee across the 21 scrips may be coinciding), I further find that the analysis
above reveals that the self-trades of the Noticee while trading in the aforesaid 21 scrips were more
than 95%, 80%, 50%, 25%, 10% and 5%of the total buy quantity of the Noticee during the day on BSE
on 1,4,7,12,15 and 20 trade days respectively out of the 88 trade dayswhen the self-trades were
executed by the Noticee. Similarly, the self- trades were more than 100%, 80%, 50%, 25%, 10% and
5%of the total sell quantity of the Noticee during the day on BSE on 3, 5,11,14,19 and 22 trade days
respectively out of the 88 trade days when the self-trades were executed by the Noticee. Also, the
self-trades were more than 50%, 25%, 10% and 5% of the total market volumein the scripduring the
day on BSEon 1, 4, 8 and 11 trade days respectively out of the 88 trade days when the self- trades
were executed by the Noticee. I also find that the trade dates when self-trades were executed by
the Noticee across 21 scrips were coinciding for atleast 10 trade dates in respect of two or more
scrips. Further, though I note that the Noticee has stated that the self trades were nothing but
coincidence, such large number of self trades on several days across scrips cannot happen by
coincidence.

27. The said argument can be better appreciated by considering the instances below detailing the
manner in which buy and sell orders were placed by the Noticee that resulted in self trades. The
instances below are merely illustrative in nature to demonstrate the fact thatthe self-trades
_____________________________________________________________________________________________
Adjudication order in respect of Mr. PrashantKamble
Page 17 of 29

executed by the Noticee for 75,725 shares, across 21 scrips,through 189 trades and on 88 trade days
during the investigation period, were not mere coincidence, but, with an intention to create artificial
volume in the respective scrips:

A. Crystal Software Solutions Ltd.

Trade Date 26-12-2008, Self-trade on 26.12.2008 for 3,538 and 3,611 shares
On 26.12.2008, a total of 23,751 shares got traded on BSE. It is observed that on the said date, the
Noticee bought 14,000 shares and sold 7,604 shares. Thus, almost one-third of the market volume
on 26.12.2008 was due to the trades of the Noticee.
Sell Order of the Noticee on 26.12.2008vide sellOrder id 49824400000006525
Vide Order id 49824400000006525, the Noticee placed sell order for 5,000 shares at Rs. 8.99 at
10:03:11;
The said order was updated at 10:10:22 from 5,000 shares to 10,000 shares at the same rate Rs.
8.99;
At 10:10:43, the said order of 10,000 shares was updated to lower the price to Rs. 8.94;
At 10:52:10, the Order was updated to lower the quantity from 10,000 shares to 8,450 shares by
deleting 1,550 shares;
At 11:29:10, the order was updated to increase the rate from Rs. 8.94 to Rs. 9.14;
At 14:03:44, the order was further updated to increase the rate from Rs. 9.14 to Rs. 9.15;
At 14:07:34, the order was again updated to increase the rate from Rs. 9.15 to Rs. 9.39;
At 15:02:14, the order was updated to reduce the rate from Rs. 9.39 to Rs. 9.38;
At 15:09:30, the order was updated to reveal quantity of 86;
At 15:24:05, the order was again updated to reduce the price to Rs. 8.54;
At 15:25:13, the order was updated to lower the quantity by 2 shares.
It is observed from the trade log that at 10:03:11, when the sell order for 5,000 shares at Rs..
8.99 was placed, the trades immediately prior to the same were getting executed at Rs. 9 and
even above, despite the same, the Noticee placed the sell order on the lower side. Further, at
11:29:10, when the trades immediately prior were getting executed between Rs. 8.54 to Rs.
8.92, the Noticee increased the sell order rate from Rs. 8.94 to Rs. 9.14. At 14:07:34, when the
trade rate immediately prior from 14:04:12 to 14:04:26 had moved up to Rs.. 8.98/ Rs. 8.99, the
Noticee increased the sell order rate further from Rs. 9.15 to Rs. 9.39.

_____________________________________________________________________________________________
Adjudication order in respect of Mr. PrashantKamble
Page 18 of 29

Buy Orders for 10,000 shares and 4,000 shares of the Noticee on 26.12.2008
Vide Order id 39121000021124063, the Noticee placed buy order for 10,000 shares at Rs. 9.40
at 15:05:27;
Again vide Order id 39121000021124073, the Noticee placed sell order for 4,000 shares at Rs.
9.38 at 15:07:28;
It is observed from the trade log that before the Noticee placed the aforesaid two buy orders at
Rs. 9.40 and Rs. 9.38, trades from 10:04:48.135050 upto 15:00:03.891084 were getting
executed at a price less than Rs. 9/-. The last trade prior to the Noticees placing buy order id
39121000021124063 was at 15:05:27 was at Rs. 8.54. However, despite the same the Noticee
placedthe two buy orders for 10,000 shares and 4,000 shares at Rs. 9.40 and 9.38 at 15:05:27
and 15:07:28 respectively.

The sell order of the Noticee placed vide sell order id 49824400000006525 was pending execution,
except for a trade of 450 shares which had got executed at 10:39:02.367416 at Rs. 8.94. The buy
order id 39121000021124063 of the Noticee for 10,000 shares first matched with the pending sell
orders in the system, before matching with the pending sell order of the Noticee himself, thereby
resulting in self trade for 3,538 shares at 15:05:27.895349. Thus, 4,462 shares (8,450-450-3,538) of
sell order id 49824400000006525 remained unexecuted. Immediately thereafter at 15:07:28, it is
observed that the Noticee placed another buy order id 39121000021124073 for 4,000 shares at Rs.
9.38, of which 3,611 shares matched with his own pending sell order id 49824400000006525, 5
shares got executed with third party and balance 844 (846-2) shares remained unexecuted.

From the above, it becomes clear that though the Noticee placed the sell order id
49824400000006525 much before he placed the buy order id 39121000021124063, till such time
that the buy order was placed, the Noticee had kept the sell order rate away from the market rate either below or above, so that the trade does not get executed. I note here that the Noticee has
claimed that his trades were in the nature of jobbing. However, I find that the Noticee was placing
his buy orders much above the prevalent trade rate at the relevant point of time. The proximity of
time, thus, lost its significance, since the buy and sell orders were placed at rates away from the
prevailing market rates. Further immediately after self-trade was executed for 3,538 shares at
15:05:27, he placed another buy order id 39121000021124073 to match with the pending sell order
_____________________________________________________________________________________________
Adjudication order in respect of Mr. PrashantKamble
Page 19 of 29

id 49824400000006525, after which self- trade for 3,611 shares got executed. Thus, it is observed
that the Noticee placed the sell Order vide sell order id 49824400000006525 and buy orders for
10,000 shares vide buy Order id 39121000021124063 and 4,000 shares vide buy order id
39121000021124073 only with the intention to execute self-trade so as to create artificial volume in
the scrip. Further the buy orders of the Noticee each time moved the price up fromRs. 8.54 to Rs.
9.38 i.e. by Rs. 0.84 (9.84%).

B. Gandhinagar Hotels Ltd.

Trade Date 01-06-2010, Self-trade on 01.06.2010 for 1,000, 11,819 and 581 shares
On 01.06.2010, a total of 42,078 shares got traded on BSE. It is observed that on the said date, the
Noticee bought 21,465 shares and sold 17,630 shares.
Self-trade on 01.06.2010 for 11,819 and 581 shares
At 15:17:51, the Noticee placed a sell order for 12,400 shares at Rs.93.25 vide Sell Order id
17000067027187. The last trade prior to the Noticees placing of the sell order was at
14:48:06.477242 which had got executed at Rs.90. Trades prior to the same from
14:16:44.631180 to 14:48:06.477007 were getting executed in the range of Rs. 89.75 to Rs.91.
Thus, it is noted that the sell order was placed at a price higher to the prevailing market rate;
On 01-06-2010, when the Noticee placed buy order for 12,500 shares at Rs.93.25 vide buy order
id 12000060029393 at 15:21:09, trades immediately prior to placing the said order from
15:20:45.131178 upto 15:20:52.141759 were getting executed between Rs. 89 to Rs. 90.75.
Despite the same, the Noticee placed buy order for 12,500 shares at Rs. 93.25, matching his sell
order rate;
As a result at 15:21:09.458223, 15:21:09.462188 and 15:21:09.478210 buy order id
12000060029393 matched with pending sell order of third parties resulting in trades for 81
shares, 500 shares and 100 shares respectively before self- trade for 11,819 shares got executed
at 15:21:09.478556 due to matching of the balance shares of buy order id 12000060029393 with
sell order id 17000067027187;
Thus, 581 shares (12,400 11,819) of sell order id 17000067027187 remained unexecuted;
Immediately thereafter at 15:21:12, the Noticee placed buy order for 600 shares at Rs.93.25
vide buy order id 13000058043084 and thereafter at 15:21:17 updated the said order to reduce
the order by 14 shares to 586 shares (i.e. 600-14);

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 At 15:21:13.016616, the buy order id 13000058043084 of the Noticee matched with pending
sell order id 17000067027187 of the Noticee resulting in self trade of 581 shares;
The balance 5 shares of buy order id 13000058043084 matched with third parties at
15:21:36.770395;
It is further pertinent to note here that buy order id 12000060029393 of the Noticee resulted in
increase in the price of the scrip from Rs. 89 to Rs. 92.8, then to Rs. 93.1 and then to Rs. 93.25
when trades of 81 shares, 500 shares and 100 shares got executed with third parties before self
trade of 11,819 shares got executed;
Thus, it is observed that the buy order id 12000060029393 of the Noticee which resulted in self
trade getting executed for 11,819 shares resulted in increase in the price of the scrip by Rs.4.25
(93.25-89) over the last traded price (LTP) i.e. an increase of 4.77% over the LTP;
From all of the above it becomes clear that the Noticee placed the sell Order for 12,400 shares
vide sell order id 17000067027187 at Rs. 93.25 and buy orders for 12,500 shares at Rs. 93.25
vide buy Order id 12000060029393 and 600 shares at Rs. 93.25 vide buy order id
13000058043084, which was further reduced to 586 shares, only with the intention to execute
self-trade so as to create artificial volume in the scrip and also simultaneously to increase the
price of the scrip.

C. G.S. Auto International

On 26.03.2010, a total of 3,33,443 shares got traded on BSE. It is observed that on the said date, the
Noticee bought 40,480 shares and sold 26,035 shares.
Self trade on 26.03.2010 for 10,880 and 1,000 shares
Vide sell Order id 17000032042376, the Noticee placed a sell order for 12,000 shares at Rs. 45 at
15:29:29;
Vide buy order id 20000031036539, the Noticee placed a buy order for 11,900 shares at Rs.
45.20 at 15:57:11;
Between trade time 15:29:29 to 15:42:00.515155 only 3 trades for 50 shares, 10 shares and 1
share got executed;
The next trade was only at 15:57:11.609580, when 1020 shares of the Noticees buy order id
20000031036539 matched with the pending sell order of the third party;

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 Immediately thereafter at 15:57:11.610133, buy order id 20000031036539 of the Noticee

matched with sell order id 17000032042376 of the Noticee resulting in self trade of 10,880
shares;
Thus, 1120 shares of sell order id 17000032042376 of the Noticee remained unexecuted;
Immediately thereafter at 15:57:28, the Noticee placed a buy order for 1,000 shares at Rs. 45.20
vide buy order id 23000033041956;
The said buy order id 23000033041956 matched with the pending sell order id 17000032042376
of the Noticee resulting in self trade for 1,000 shares;
Out of the balance 120 shares of sell order id 17000032042376, 26 shares matched with third
party at the end of the trade session for the day and balance of 94 shares remained unexecuted;
Thus, it is observed that the Noticee placed the sell Order for 12,000 shares vide sell order id
17000032042376 at Rs. 45 and buy orders for 11,900 shares at Rs. 45.20 vide buy Order
id20000031036539 and 1,000 shares at Rs. 45.20 vide buy order id 23000033041956 only with
the intention to execute self trade so as to create artificial volume in the scrip.

28. I find here that the Noticee has submitted that he was a trader in securities and more specifically
into jobbing activities to earn his livelihood. As regards the same, the usual rule of thumb is that
jobbing or any other purchase / sell activity in securities market has to follow the basic rule viz. buy
cheap and sell costly to earn a profit. The same was also observed by the Hon'ble SAT in the matter
of Angel Broking Ltd. (Order dated October 1, 2014). In the matter, I find thatthe Noticee too vide
reply dated March 23, 2015 has inter alia argued that the objective of the trader / jobber is to trade
in maximum number of shares (usually with a thin spread) intraday. However, as demonstrated in
para 27 above, it is observed that the Noticee was placing buy orders at a huge increment to the last
traded price, and in a manner,so as to match with his pending sale orders. For example, in the scrip
of M/s. Gandhinagar Hotels Ltd., it is noted that the Noticee had placed the sell order for 12,400
shares and buy orders for 12,500 shares and 600 shares, at the same price of Rs. 93.25, just three
minutes apart. I find here that the Noticee had placed the buy order at Rs. 93.25 to match his own
pending sell order price, although trades immediately prior were getting executed at much lower
price between Rs. 89 to Rs. 90.75. Same is the case in the scrip of M/s. Crystal Software Solutions
Ltd., wherein the buy orders for 10,000 shares and 4,000 shares were placed by the Noticee at Rs.
9.40 and Rs. 9.38 respectively, i.e. at a steep increment to the last traded price of Rs. 8.54, so as to
match with his own pending sell order for 10,000 shares, whose price was updated to Rs. 9.38. In
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such a scenario, I am unable to accept the argument of the Noticee that thematching of his own buy
and sell orders were only a coincidence and was unknown to him at the time the trades were
executed. On the other hand, the manner in which buy order rates were matched with the sell order
rates placed/ updated a few minutes apart, only strengthens the case against the Noticee that the
self trades were executed by the Noticee to defeat the purpose of anonymity of the trading system
of the stock exchanges and were not mere coincidences. In fact, it is observed that there were 111
(59% of total self-trades) trades for 53,185 (70% of total self -trades) shares, where the time
difference between placing the buy orders and the sell orders was less than 10 minutes.

29. In the matter, I note further that the Noticee has stated that the trades were in the nature of
jobbing or day to day trading, wherein delivery is avoided to extent possible. However, I note that
the actual trades were observed to be contrary to the rationale of jobbing as the Noticee was
placing the buy orders at steep increment to the last traded price and matching his buy order rates
to match with his pending sell order rates. The Noticee, I find, has inter aliafurther stated that such
trades are recognized, legal and permitted by BSE and NSE, therefore, it is erroneous to draw a
presumption that the Noticees trades were not intended to result in change of beneficial
ownership, merely because Noticeesorders matched against each other and / or because no
delivery was taken by him. In the matter, I find that the Hon'ble Securities Appellate Tribunal (SAT),
in the case of Anita Dalal vs. SEBI (Order dated 03.12.2012) has held that:
"7. The appellant has been found guilty of self trade as well. Self trades admittedly are illegal. This
Tribunal has held in several cases that self trades call for punitive action since they are illegal in
nature. In M/s. JayantilalKhandwala& Sons Pvt. Ltd. vs. Securities and Exchange Board of India
(Appeal no. 24 of 2011 decided on June 8, 2011) this Tribunal has held that one cannot buy and sell
shares from himself. Such transactions are obviously fictitious and meant only to create false
volumes on the trading screen of the exchange."

30. In the matter, I find that the Noticee has inter aliafurther stated that in an illiquid scrip, it is quite
possible that while squaring off the positions to avoid margin calls or loss or delivery, the orders of a
trader may match his own previous pending orders and it is erroneous to allege that such trades
were malafide, fraudulent and intended to create an artificial volume. However, in the extant case,
the manner in which the Noticee was placing/ updating the orders by keeping his buy/ sell order
rates away from the market rates and then matching them with the corresponding sell/ buy orders, I
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find that the intent of the Noticee was clearly to cause self trades and create artificial volumes in
the scrip. I note that the Noticee has stated that there was no reason for any person to create
volume in a scrip at 3 pm viz. close to day end. However, volume created at the end of the day also
forms a part of the total volume made in the scrip on that day, and the said information will be
available to traders and investors when the scrip opens for trading on the next day. The Noticee was
free to trade adopt any business/ risk containment model, but, had to ensure that it was in
conformity with the regulatory framework.

31. Further, contrary to the stand taken as such vide letter dated March 23, 2015 and at the first
hearing that self trades occurred as mere coincidences while carrying out jobbing transactions, I find
that vide subsequent letter dated April 21, 2015, the ARs changed the said stand to claim that self
trades had occurred as a result of transfer of positions from one stock broker to another. It has
been stated that the Noticee was given exposure limits by stock brokers, usually for a period of 5
days, andat the end of said tenure, Noticee was required to either square off his positions or to take
delivery. It has been further stated that the Noticee neither wished to take delivery, since he did not
have sufficient funds to do so, nor, did he wish to square off too, because he would then have
incurred a loss. The Noticee, it has been argued, hence, sought exposure limits from other brokers
who granted him the same. And while transferring his positions from the existing stock brokers to
the new ones by placing counterparty orders (to his existing positions) through the new stock
brokers, self trades got executed.
32. I find ithard to believe that any new stock broker could have allowed transfer of client position and
provided exposure limits to a client, who did not have sufficient funds to take delivery. It is pertinent
to mention here that despite allowing the Noticee time as sought to obtain the corroborating
documents and records from his stock brokers to substantiate thesaid submission, the Noticee was
not able to produce any document in support of his aforesaid claim that new stock brokers provided
exposure limits to him. Further, an opportunity of second hearing was granted to the Noticeein view
of the specific request made by the ARs on behalf of the Noticee vide letter dated April 21, 2015.
Contrary to the earlier stand that self trades were mere coincidences that happened while carrying
out jobbing transactions, ARs at the second hearing claimed that the Noticee knowingly traded in a
manner that would cause self-trades, in order to transfer his positions from the existing stock broker
to the new ones, who allowed him exposure limits. The ARs too did not produce any documentary
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evidence in support of the said claim. The ARs at the second hearing thereafter confirmed that all
submissions in the matter were made on the behalf of the Noticee. Thus, I presume that the
changed version was an afterthought by the ARs on behalf of the Noticee in an attempt to try and
convincingly explain those self trades, wherein one leg of the transaction was done through one
stock broker and other leg through another stock broker. However, vide both the versions, I note
that the Noticee/ AR on behalf of the Noticee has admitted execution of self trades by the Noticee.

33. I note that Regulation 3 of PFUTP Regulations prevents any person from buying, selling or dealing in
securities in fraudulent manner, engage in any act, practice, course of business which operates or
would operate as fraud or deceit upon any person in connection with any dealing in or issue of
securities which are listed or proposed to be listed on a recognized stock exchange in contravention
of the provisions of the Act or the rules and the regulations made there under. Regulation 4(1) of
PFUTP Regulations lays that no person shall indulge in a fraudulent or an unfair trade practice in
securities. Regulation 4(2) (a) of PFUTP Regulations, prohibits a person from indulging in an act
which creates false or misleading appearance of trading in the securities market. Regulation 4(2)(g)
of PFUTP Regulations, inter aliaprohibits entering into a transaction in securities without intention
of performing it or without intention of change of ownership of such security.

34. I find that the submissions made by the Noticee cant suffice for his inability and non complicity in
the aforesaid transactions and cant establish that he was not guilty of the violation of the
aforementioned allegations. Therefore, I dont find the explanations of the Noticee
satisfactory.Further, the Noticee cannot absolve from the liabilities by claiming that the trades were
nothing but coincidenceor that they got executed while transfer his positions from the existing
stock broker to the new ones, who allowed him exposure limits. Thus, in the instant case in light of
the facts of the case and materials available on record, I conclude that Noticee has violated the
provisions of Regulation 3 (a), (b), (c) and (d), 4 (1), 4 (2) (a) and (g) of the PFUTP Regulations.

35. Now, the next issue for consideration is what would be the monetary penalty that can be imposed
on the Noticee for violation of Regulation 3 (a), (b), (c) and (d), 4 (1), 4 (2) (a) and (g) of the PFUTP
Regulation. The Honble Supreme Court of India in the matter of SEBI Vs. Shri Ram Mutual Fund
[2006] 68 SCL 216(SC) held that In our considered opinion, penalty is attracted as soon as the
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contravention of the statutory obligation as contemplated by the Act and the Regulations is
established and hence the intention of the parties committing such violation becomes wholly
irrelevant.

36. Thus, the aforesaid violations by the Noticee makes him liable for penalty under Section 15HA of the
SEBI Act, which read as follows:
15HA - Penalty for fraudulent and unfair trade practices- If any person indulges in fraudulent and
unfair trade practices relating to securities, he shall be liable to a penalty of twenty-five crore rupees
or three times the amount of profits made out of such practices, whichever is higher.

37. While determining the quantum of penalty under sections 15HA, it is important to consider the
factors stipulated in section 15J of SEBI Act, which reads as under:
15J - Factors to be taken into account by the adjudicating officer
While adjudging quantum of penalty under section 15-I, the adjudicating officer shall have due
regard to the following factors, namely:(a) the amount of disproportionate gain or unfair advantage, wherever quantifiable, made as a
result of the default;
(b) the amount of loss caused to an investor or group of investors as a result of the default;
(c) the repetitive nature of the default.

38. It is difficult, in cases of such nature, to quantify exactly the disproportionate gains or unfair
advantage enjoyed by an entity and the consequent losses suffered by the investors. I have noted
that the investigation report also does not dwell on the extent of specific gains made by the Noticee.
However, I find that the Noticee by executing self trades, which implies the trades in which both
buyer and seller are the same party and does not result in change of beneficial ownership, created
artificial volumes in the respective scrips in which he traded, thereby sending wrong signal to the lay
investors about trading in the said scrip. Self trades are, hence, considered to be serious violation,
even in the absence of noticeable market effect, because they do not reflect the forces of supply
and demand and give a false impression with respect to the market liquidity.

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39. I note that person found to be guilty of violating PFUTP Regulations can be imposed a penalty of
Rs.25 crore or three times the amount of profit made, whichever is higher, under Section 15HA of
the Act. The detailed analysis, brought out as above, of the orders placed by the Noticee that
resulted in self-trades, dismisses the Noticees version that the alleged self-trades were in the
nature of jobbing or day trades and the same were nothing but coincidences. On the contrary, the
analysis above clearly demonstrates that the Noticee knowingly engaged in execution of self-trades;
which were more than 95%, 80%, 50%, 25%, 10% and 5%of the total buy quantity of the Noticee
during the day on BSE on 1,4,7,12,15 and 20 trade days respectively, more than 100%, 80%, 50%,
25%, 10% and 5%of the total sell quantity of the Noticee during the day on BSE on 3, 5,11,14,19 and
22 trade days respectively and were more than 50%, 25%, 10% and 5% of the total market
volumeduring the day on BSE on 1, 4, 8 and 11 trade days respectively out of the 88 trade days
when the self- trades were executed by the Noticee in 21 scrips.I find that this is sufficient to prove
that the Noticee has created a false or misleading appearance of trading in violation of Regulation 3
(a), (b), (c) and (d), 4 (1), 4 (2) (a) and (g) of the PFUTP Regulations.

40. Further, it is apparent from the case laws referred above that self trades are, ordinarily and of their
nature, baneful practices which will, invariably, have the purpose and, often, the effect of interfering
with the integrity of securities market, even though such self trades may be miniscule in quantity.
Vide Order dated October 22, 2013, the HonbleSAT while upholding the Order passed by the WTM
of SEBI in the matter of M/s. Angel Broking Pvt. Ltd. has held that the argument that the turnover in
M/s. Sun Infoway Ltd. scrip was miniscule compared to the large turnover of the appellant and
hence penalty need not be imposed against ABL cannot be accepted, because imposition of penalty
for violating provisions of SEBI Act and regulations made thereunder are not dependent upon total
turnover of person violating the provisions of SEBI Act/ regulations made thereunder. The Honble
SAT has opined that one who has violated the provisions of SEBI Act and regulations made
thereunder, must suffer even if turnover in the scrip in which violations are found is miniscule
compared to the total turnover of that person. This sort of activity is, therefore, rightly considered
to be illegal, and justifiably so.

41. I find that in the matter of M/s. Angel Broking Private Ltd., the Honble SAT vide Order dated
October 01, 2014 has upheld the penalty of Rs. 10 lacs imposed on client M/s. Angel Infin Private
Ltd. under section 15HA of SEBI Act, and Rs. 10 lacs under section 15HA of SEBI Act & Rs. 10
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lacsunder 15HB of the SEBI Act on the stock broker M/s. Angel Broking Private Ltd., in respect of 4
self-trades for 9,866 shares. Although M/s. Angel Broking Private Ltd had appealed before the
Hon'ble Supreme Court in the matter, the Hon'ble Supreme Court dismissed the appeal observing
that We find no ground to interfere with the impugned order passed by the Securities Appellate
Tribunal. Similarly, I find, in the case of M/s. ISF Securities Ltd., the Honble SAT vide Order dated
December 19, 2014 has upheld the penalty of 10 lacsunder 15HA of the SEBI Act and Rs. 1 lacs under
15HB of the SEBI Act imposed on stock broker M/s. ISF Securities Ltd. in respect of self-trades for
7,534 shares on 8 trade days.

42. In the instant case, I find that the Noticee has executed such an illegal operation repeatedly by
indulging in 189 self trades,on 88 trade days, in a total of 21 scrips,for 75,725 shares during the
investigation period, thus, detrimental to the smooth functioning of the securities market, and
hence, deserves to be viewed seriously. Out of the same, I find that the Noticee had executed self
trades for 44,434 shares on 8 trade days, across 6 scrips, wherein self trade volume as a percentage
of the total market volume on BSE on the day was more than 10%.

ORDER

43. After taking into consideration all the facts and circumstances of the case, I impose a penalty of Rs.
50,00,000/- (Rupees Fifty LakhOnly) under section 15HA of the SEBI Act on the Noticee Mr.
PrashantKamble,which will be commensurate with the violations committed by the Noticee.

44. The Noticee shall pay the said amount of penalty by way of demand draft in favour ofSEBI Penalties Remittable to Government of India, payable at Mumbai, within 45 days of receipt of this
order. The said demand draft should be forwarded to theEnforcement Department (DRA) - II, SEBI
Bhavan, Plot No. C 4 A, G Block, BandraKurla Complex, Bandra (E), Mumbai 400 051.

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45. In terms of rule 6 of the Rules, copies of this order are sent to the Noticee and also to the Securities
and Exchange Board of India.

Date: July 31, 2015

Place: Mumbai

Anita Kenkare
Adjudicating Officer

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