Lawstreet Journal

Registration of Stock Trader Cancelled by SEBI due to Fraudulent Trading

Lawstreet Journal 10 Jul 2020 8:31pm

Image courtesy: Lawstreet Journal Business Registration of Stock Trader Cancelled by SEBI due to Fraudulent Trading

SEBI, on Wednesday, 8th July 2020, terminated the registration of a stockbroker for involvement in fraudulent trading activities in the scrip of Maharashtra Polybutenes Ltd. Capital Market Regulator Securities and Exchange Board of India (SEBI), in the order released, said that it was canceling the certificate of registration given to the noticee namely Vishal Vijay Shah as a stockbroker. It was reported that Shah had entered into a circular and synchronized exchange with 115 front organizations in the scrip of Maharashtra Polybutenes, which led to the creation of a fake or deceptive impression of trading in otherwise illiquid scrip. In June 2015, the watchdog named the Designated Authority (DA) to review the infringements reported against the noticee and sent the inquiry report dated 31st May 2017 to the Designated Member.

It was observed that there were three instances of first-level circular transactions beginning from the shares issued to Shah by the promoter of Maharashtra Polybutenes. SEBI stated, “Also, the trade cycles were continued by him and in total, Shah had transferred shares to 115 front entities and bought from the same entities thereby creating an artificial volume of 24 lakh shares by way of circular trades.” “These entities sold the shares received from Shah in the securities market and Shah had repeatedly traded with the same set of entities in a circular and synchronized manner”, it further added. 

According to the regulator, Shah and other relevant companies have dishonestly handled the business by entering into deals that were not legitimate, resulting in… Continue Reading...

Tagged: SEBI   Securities and Exchange Board of India (SEBI)  
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