Market regulator Sebi has slapped a fine of Rs 2 lakh on brokerage firm Dynamic Stock Broking for its alleged role in the Pyramid Saimira Theatres Ltd (PSTL) share manipulation case.
Sebi said it has imposed "a penalty of Rs 2 lakh on the noticee (Dynamic Stock Broking) which will be commensurate with the violations committed by it."
In a probe conducted by Sebi, the market regulator said it had found the brokerage firm was one such entity which facilitated Nirmal Kotecha, one of the promoters and the largest shareholder of PSTL then, to create artificial volumes in the scrip of the firm, thereby misleading innocent investors in the market.
The regulator said it was also revealed that the entity had carried out synchronised trades and created artificial volumes in the scrip of PSTL that too hugely only on December 22, 2008.
"...noticee created artificial volume and helped Kotecha to off load his stake in the market," Sebi said its order dated November 7.
Earlier in April 2009, Sebi through an interim order had prohibited the brokerage firm among others from entering into any fresh agreements with new clients, which was further confirmed in July 2010.
The broking firm was penalised for violating the code of conduct for stock brokers prescribed by the Sebi.
The case pertains to alleged manipulation of PSTL shares by promoter P Saminathan with assistance from different market intermediaries to amass unlawful gains.
Saminathan is also alleged to have forged a Sebi letter that reportedly allowed PSTL to make an open offer for an additional 20 per cent stake in the company.
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