Sebi disposes of case against JMP Securities in Wockhardt case
Securities and Exchange Board of India (Sebi) said the charges against JMP Securities "does not stand established" and accordingly "the matter is disposed of".
A preliminary probe by Sebi had found JMP Securities' trading in scrips of Wockhardt were fictitious in nature as the broker indulged in self trades while dealing in its proprietary account.
Sebi had thereby alleged that JMP Securities violated norms pertaining to prohibition of fraudulent and unfair trade practices as well as regulations for stock brokers.
However, in its order issued Thursday, Sebi observed that there was no "corroborative evidence" available to substantiate allegations that JMP Securities indulged in price manipulation, except that self trades resulted in creation of artificial volume.
"...some of the trades could automatically match resulting in self trades on the automated anonymous trading mechanism," the regulator said.
"The corroborative evidences available on record are insufficient to substantiate that the trades executed by the noticee are fraudulent or manipulative," it added.
The case relates to a preliminary investigation into trading in the scrip of Wockhardt from August 2 to August 31 2010, following a report from National Stock Exchange that certain clients bought the shares of the company prior to the announcement date of issuance of foreign currency convertible bonds (FCCBs) and thereafter sold the same.
The probe had concluded that the trades by the entities were not based on any tips or specific information.
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