SEBI Penalizes Five Entities, Bars for Three Years

The Securities and Exchange Board of India (SEBI) took action on against five entities, imposing penalties totaling Rs 50 lakh and restraining them from participating in the securities markets for three years due to violations of regulatory norms related to Bhatia Communications and Retail (India) Ltd.

SEBI also directed the entities to disgorge a wrongful gain of Rs 7.49 crore, along with 12% interest per annum jointly and severally from July 2022 until the date of payment.

The regulator imposed a fine of Rs 10 lakh each on NNM Securities, Miker Financial Consultants, Vibhuti Commodities, Festino Vincom, and Nikunj Anilkumar Mittal for their involvement in executing trades in the scrip of Bhatia Communications during the investigation period.

During the investigation, it was found that these entities abused the stock market platform by creating a false and misleading appearance of trading, leading to price and volume manipulation in the shares of Bhatia Communications. This activity attracted unsuspecting investors to buy the company’s shares, which were later offloaded at higher prices, resulting in substantial profits.

These activities send wrong signals to the securities market and violate the Prohibition of Fraudulent and Unfair Trade Practices (PFUTP) norms.

The manipulation scheme involved a group effort and conspiracy among all noticess, indicating serious misconduct detrimental to the interests of market participants.