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Market regulator Sebi today slapped a fine of Rs 5 lakh on an individual for allegedly facilitating fraudulent trading practices in shares of Betala Global Securities Ltd (BGSL).
Securities and Exchange Board of India (Sebi) said a Jalaj I Batra indulged in circular/reversal synchronised trades with other brokers and clients in the shares of Betala Global Securities.
"...impose a total penalty of Rs 5 lakh on the noticee (Batra)...the penalty is commensurate with the default committed by the noticee," Sebi said in its order.
In a probe conducted by Sebi, the regulator found a spurt in the share price of BGSL during May 2-November 21, 2003. The regulator said the company's scrip price jumped by 254 per cent and a total of 1.54 crore shares were traded.
Sebi said a group of clients connected to each other i.e., a Mahesh Mistry traded in the shares of the BGSL.
Batra, being a part of Mahesh Mistry Group, bought 15.35 lakh shares for Rs 9.41 crore and sold a total of 6.04 lakh scrips valued Rs 6.45 crore.
"The noticee purchased 10.91 per cent of the total market volume and sold 6.29 per cent respectively. The noticee contributed 9.96 per cent and 3.92 per cent of the circular trades buy and sell volume respectively," Sebi said.
Sebi also said that evidence is suggesting that the Mahesh Mistry Group, of which noticee was a part, followed a modus operandi of artificially inflating the price and creating false volumes by executing the synchronised transactions through their brokers.