SEBI Slaps a Fine on 29 Entities

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SEBI has slapped a total penalty of Rs 1.49 crore on 29 entities because It fined for fraudulently pushing up the price and creating artificial volumes in the shares. The company involved is Gemstone Investments Ltd in 2009.

The capital market regulator SEBI had initiated a probe after detecting huge rise in traded volumes. The price of Gemstone shares during the period from January 6 to December 30, 2009.

In its 36-page order, the watchdog has imposed a total penalty of Rs 1.49 crore on 29 entities. It included many individuals.

The price of shares suddenly started to rise from Rs 21.20 to Rs 78.35. SEBI kept an eye on the price and checked all the related details because of the price rally. The daily high-low traded volume was one to 2,46,015 shares during January- December period dates in 2009.

As many as 39 entities restrained from accessing the securities market by SEBI through an interim order in February 2011. The order confirmed in July the same year.

Gemstone Investments Ltd and other 31 entities committed fraud altogether. Out of these, the regulator has imposed fines on 29 entities.

Noting that the defaults were repetitive in nature, Sebi said the notices traded in a manner because to create artificial volumes and liquidity. It is an important criterion capable of misleading the investors and help them making an investment decision.

SEBI Statement

“… this kind of activity seriously affects the normal price discovery mechanism of the securities market. People who indulge in manipulative, fraudulent and deceptive transactions should be suitably penalised for the said acts of omissions and commissions,” the regulator said in its 36-page order.

In its probe, the Securities and Exchange Board of India (SEBI) found that the entities indulged in fraudulent and manipulative manner, without real change in the ownership of shares, by way of synchronised trades to create artificial volumes and price rise in the scrip.

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