Sebi has slapped a total penalty of Rs 1.49 crore on 29 entities for fraudulently pushing up the price and creating artificial volumes in the shares of Gemstone Investments Ltd in 2009.
The capital market regulator had initiated a probe after detecting huge rise in traded volumes as well as price of Gemstone shares during the period from January 6 to December 30, 2009.
In its 36-page order, the watchdog has imposed a total penalty of Rs 1.49 crore on 29 entities, including many individuals.
It was observed that the price of the scrip unusually increased from Rs 21.20 to Rs 78.35 while the daily high-low traded volume was one to 2,46,015 shares during January-December period in 2009.
As many as 39 entities were restrained from accessing the securities market by Sebi through an interim order in February 2011 and the order was confirmed in July the same year.
Then it was found that 31 entities were connected and dealt in the Gemstone shares in a fraudulent manner. Out of these, the regulator has imposed fines on 29 entities.
Noting that the defaults were repetitive in nature, Sebi said the noticees traded in a manner meant to create artificial volumes and liquidity which is an important criterion capable of misleading the investors while making an investment decision.
"... this kind of activity seriously affects the normal price discovery mechanism of the securities market. People who indulge in manipulative, fraudulent and deceptive transactions should be suitably penalised for the said acts of omissions and commissions," the regulator said in its 36-page order.
In its probe, the Securities and Exchange Board of India (Sebi) found that the entities indulged in fraudulent and manipulative manner, without real change in ownership of shares, by way of synchronised trades to create artificial volumes and price rise in the scrip.