ARG Management Solutions Pvt. Ltd vs Securities And Exchange Board Of India

Tarun Agarwala, Presiding Officer

We have heard the learned counsel for the parties. The present appeal has been filed against the order September 27, 2022 passed by the Whole Time Member (“WTM” for convenience) of the Securities and Exchange Board of India (“SEBI” for convenience) under Section 15-I of the SEBI Act, 1992 enhancing the penalty of Rs. 10 lakhs.

We find that the Adjudicating Officer (“AO” for convenience) while considering the matter had exonerated the appellant holding that the appellant did not carry out any manipulative trades and that even though miniscule quantity of one share was made on 4000 occasions there were positive Last Traded Price (LTP) as well as negative LTP and consequently held that in the absence of any connection with any counter party the trades are not manipulative and accordingly exonerated the appellant.

SEBI in exercise of the powers under Section 15-I (3) of the SEBI Act examined the record and the WTM after considering the matter found that the trades made by the appellant on 4000 occasion in miniscule quantity was manipulative and accordingly after relying upon a decision of this Tribunal in Tanuj Khandelwal vs. SEBI in Appeal No. 357 of 2020 decided on January 04, 2021 a penalty of Rs. 10 lakhs has been imposed.

While considering the said decision of this Tribunal, we find that the penalty in the said matter was reduced from Rs. 8 lakhs to Rs. 1 lakh as it was found to be harsh and excessive.

In the instant case, we find that the appellant was exonerated and in the absence of any connection with the counter party, we are of the opinion, that the minimum penalty should have been imposed instead of Rs. 10 lakhs. In the instant case, the minimum penalty is Rs. 5 lakhs.

Thus, while affirming the order of the WTM we reduce the penalty from Rs. 10 lakhs to Rs. 5 lakhs. In the circumstances of the case, the appeal is partly allowed. Parties shall bear their own costs.