Penalized with Rs. 15 lakhs? Sebi hunts down individuals violating trading rules - YP Buzz News

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                   On March 18, 2013, a meeting was conducted between Pankaj Agarwal and I Unnikrishnan and Sachin Agrawal of Manappuram Finance Ltd. (MFL), wherein the company’s quarterly results were discussed. Pankaj Agarwal has been charged with violating the insider trading rules by communicating the procured unpublished price-sensitive information through a research report.

According to what one of the orders says, “After the aforesaid meeting, Ambit Capital changed its rating of MFL stock from ‘buy’ to ‘under review’.” It was also stated that Ambit Capital published a research report based on the meeting it had with MFL which was followed by a distribution of the same amidst its clients on March 19, 2013, before the market opening hours.




It was also stated that some of the clients of Ambit Capital who had received the research report had sold MFL shares based on that report. As per Sebi orders, MFL, Unnikrishnan, the executive director and deputy CEO of the company, and Agarwal had communicated the unpublished price sensitive information (UPSI) to the market people even before it was disclosed to the exchange.

Sebi reported that Pankaj Agarwal was unable to maintain the discretion of the price-sensitive information thereby violating the insider trading rules. In the minutes of the board meeting held in March 13, 2013, MFL informed that the company may have to report a negative profit for the quarter ended March 31, 2013, which is regarded as unpublished price sensitive information according to the orders of Sebi and that there may be contradictory conclusions as to what the stakeholders have expected.

In an order passed on Monday, the regulator noted that the meeting held between the MFL representatives and analysts of Ambit Capital Private Limited was aimed towards seeking professional advice which was supposedly about guiding the market about quarterly results.  According to the Sebi order, Pankaj Agarwal, a part of the research team of Ambit Capital Private Limited, has been charged with a fine of Rs. 15 lakhs.

Sebi said that the MD and CEO of MFL, V.P. Nandakumar and a board member, B.N. Raveendra had proved to be inefficient in supervising the implementation of the code of conduct regarding the violations of Sebi norms. Also, according to Sebi, the compliance officer, Rajesh Kumar had shown his incompetency in not being able to implement the code of conduct.  

The Securities and Exchange Board of India (Sebi), on Wednesday, charged Bankri Rudraswamy Prasanna Kumar and Shashwat Kumar Gupta with a fine of Rs. 1 lakh each for violating the insider trading rules in the case of Mindtree. They were the employees of Mindtree and during the calendar quarter from January 2019 to March 2019 they had executed transactions that aggregated to a traded value more than Rs. 10 lakh each. They were asked to disclose to the company of such transactions within two trading days. However, they were unable to process the necessary discloser within the given time frame and this was charged with violating the Prohibition of Insider Trading rules, according to Sebi.


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