In the same case, Securities and Exchange Board of India (Sebi) has disposed of the matter against MR Share Broking.
Sebi investigation report had alleged that both the
brokers had traded among their related entities at the bourses to create artificial volumes in shares of Soundcraft with the intention of manipulating the firm's share prices.
They had also failed to exercise due diligence while dealing with its clients in the scrip.
In the order against VRM Share Broking, Sebi gave the broker "benefit of doubt" on charges that it was part of premediated plans of any counter party for creation of artificial volumes in the shares of Soundcraft.
However, the market regulator noted that the broker had "executed several trades for its connected client which are perfectly synchronised with respect to price, quantity and time".
In this regard, Sebi said that VRM Share Broking "being a stock broker and supposedly having professional competence,
should take utmost care and be more vigilant while executing trades on behalf of its clients in future".
In its order against MR Share Broking, Sebi said that the link between the broker, his client and other connected entities had "not been established".
Further, "there is no material to suggest complicity" of
MR Share Broking in any manipulative and fraudulent device of other entities, it added.
Accordingly Sebi has given the broker "the benefit of
doubt" adding that it did not consider it necessary to issue any action against it.
Sebi had initiated a probe after it noticed that the
scrip of Soundcraft had witnessed sharp fluctuations in its price and volume at BSE and NSE during the period July 2, 2001 to January 2, 2002.