SC upholds Sebi's suspension order on two brokerage houses
February, 05th 2011
The Supreme Court today upheld the order of market regulator the Securities and Exchange Board of India (Sebi) to suspend registration of two brokerage houses Amgis Holdings and Pals Overseas for wrongly influencing the price of a particular scrip.
A Bench headed by the Chief Justice S H Kapadia dismissed the petitions filed by Amgis Holdings and Pals Overseas challenging the orders of Sebi.
The Sebi on July 7, 2007 directed National Stock Exchange to suspend registration of these two after finding them guilty of fictitious trading in the scrip of Roofit Industries between October, 1990 and May 2001.
The probe found that the brokerage houses had traded on behalf of their clients, who were related to each other as well as the company, thereby influencing the price.
Subsequently, Sebi issued them show cause notices under the Prohibition of Fraudulent and Unfair Trade Practices relating to the Securities Market Regulation, 1995.
Later, in July, 2007 Sebi directed NSE to suspend their registration.
The brokering houses challanged the Sebi order before the Securities and Appellate Tribunal (SAT), which also rejected their plea on December, 2010. It said the two were involved in the gameplan to manipulate the market through execution of fictitious and non-genuine trade.