The Hindu Business Line : SEBI suspends four brokers in Home Trade share rigging case

THE Securities and Exchange Board of India (SEBI) has suspended four stock brokers (two each of Bangalore and Pune Stock Exchanges) and slapped a penalty on another Bangalore Stock Exchange (BgSE) member for creating false market coupled with surge in prices of Home Trade Ltd (HTL) during November 16, 1999 to March 31, 2000 period.

BgSE member Swagath Securities has been suspended for three months (from December 21 to March 20) while First Securities Pvt Ltd was suspended for a period of 15 days (December 21 to January 4) for rigging the share prices of HTL, a press release by SEBI issued on Tuesday said.

Another BgSE member Nereyeth Securities Pvt Ltd has been slapped with a penalty for its "failure to exercise due care, skill and intelligence" while dealing with the clients, the SEBI order dated November 30, said.

Pune Stock Exchange (PSE) members Kabu Investment Services and Jagannath Vinod Kumar were also suspended for a period of one month and 15 days respectively for the same offence. Kabu Investment Services will be suspended from trading from December 21 to January 20 while Jagannath Vinod has been suspended from December 21 to January 4, the SEBI order said.

The scrip of HTL was listed in Bangalore Stock Exchange on November 16, 1999 at Rs 275. The prices touched Rs 315 within two weeks (by December 6, 1999). Thereafter, there was continuous sharp increase in the prices of the scrip to touch Rs 815 on March 31, 2000.

Investigation was conducted by SEBI into the buying, selling and dealings in the scrip of HTL by the members of BgSE and PSE and it was alleged that the broker had resorted to circular trading and price manipulation, thereby contravening the provisions of SEBI (Stock Broker and Sub-Broker) Regulations, 1992.

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