Business Daily from THE HINDU group of publications
Thursday, Nov 22, 2007
ePaper | Mobile/PDA Version
Business Daily from THE HINDU group of publications Thursday, Nov 22, 2007 ePaper | Mobile/PDA Version |
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Markets
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Regulatory Bodies & Rulings Industry & Economy - Economic Offences Web Extras - Financial Services Our Bureau Mumbai, Nov 21 SEBI said today that it has on Tuesday passed its first set of ‘Consent Orders’ against four market participants for infringement of specific provisions of the securities law. SEBI had proceeded against three of them in four cases of manipulation and irregularities in securities trading while in respect of the fourth SEBI’s action dealt with violation of regulations pertaining to portfolio managers. These cases have now been settled on payment of penalties by those charged with such violations. P.N. Vijay Financial Services, ADD Investments, Jyotish Bhogilal Stock Brokers and Ratnakar Finstock, made payments ranging between Rs 1 lakh and Rs 5 lakh each “towards consent terms” to get their cases settled. SEBI had initiated proceedings against these market participants and the same were pending final adjudication. In all these consent order cases, the payment is made to settle the matter on hand, “and without admission or denial of guilt on the part of the applicant to the finding of fact or conclusion of law”. The new system of Consent Orders was introduced by SEBI in April this year to avoid prolonged litigation and to expedite settlement of disputes. Under this system, entities accused of violating SEBI laws can approach a High Powered Advisory Committee of SEBI for compounding of offences and seek a “consent order”. The terms of the consent order proposed by the applicant will be considered by the Committee which may grant such an order after considering the gravity of the offence, the intention of the accused, his history of non-compliance, the nature of violation, and so on. Consent orders may prescribe remedial action and payment of penalties.
Under the conventional procedure, once SEBI finds a market participant as having violated some aspect of securities legislation the latter can appeal to the Securities Appellate Tribunal. The next higher body of appeal is the High Court. This consent order system takes its inspiration from the US market regulator, the Securities and Exchange Commission, which settles a majority of its administrative and civil cases through this method. The passing of a consent order by SEBI is, however, without prejudice to the right of SEBI to take enforcement actions including commencing/reopening of the pending proceedings against the applicant if SEBI finds that representations made by the applicant in the consent proceedings are discovered to be untrue. SEBI can also take action if the applicant has breached any of the clauses/conditions of undertakings, waivers, filed during the consent proceedings with SEBI. More Stories on : Regulatory Bodies & Rulings | Economic Offences | Financial Services
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