Sebi imposes Rs 3.5 L fine on a sub broker of ASE Capital
It was alleged that Jhaveri was involved in price manipulation in the scrip of Aditya International Ltd (AIL) in many instances by placing orders at prices higher than the last traded price (LTP) and had influenced the price of the scrip in multiple instances of new price discovery.
In its order dated December 17, Securities & Exchange Board of India (Sebi) has imposed "a consolidated penalty of Rs 3.5 lakh on Rajesh N Jhaveri, sub broker of ASE Capital Markets Ltd."
During the investigation period from December 2003 to June 2004, Sebi found the price of the AIL shot up from Rs 65 to Rs 307 on February 13, 2004 and thereafter fell to Rs 25.70 on June 1, 2004.
After analysing the trading pattern, Sebi observed that Jhaveri had undertaken 23 trades and in 12 instances he had put orders at higher than LTP in the range of 0.52- 8.33 per cent. Thus, majority (52.17 per cent) of his trades were higher than LTP.
Sebi said that "the noticee's (Jhaveri) trading at higher than LTP resulted in the price of the scrip going up and were done with a view to set the price or benchmark the price at a desired level and influence the innocent investors."
"By purchasing at a higher price in majority of its trade,
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