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Adjudication proceedings against noticee abated because noticee expired before the issuance of show cause notice – The Securities and exchange board of India 

Adjudication proceedings against noticee abated because noticee expired before the issuance of show cause notice – The Securities and exchange board of India 

SEBI observed large scale reversal of trades in the Stock Options segment of the Bombay Stock Exchange leading to the alleged creation of artificial volume in the stock options segment and the noticee Mr. Mahesh Kumar Agarwala found suspicious for these reversal trades and allegation of violating  the provisions of Regulations 3(a), (b), (c), (d) and Regulations 4(1),4(2)(a) of the SEBI “PFUTP Regulations, 2003 and SEBI initiated adjudication proceedings and appointed ROHIT DUBEY ADJUDICATING OFFICER in [ADJUDICATION ORDER NO.: Order/RD/AP/2021-22/14751]  

A show-cause notice was sent to the Noticee under Rule 4(1) of the Adjudication Rules to show why an inquiry should not be conducted and why penalty should not be imposed upon the noticee under Section 15HA of the SEBI Act for the violations alleged to have been committed by the Noticee. A letter came in response where   It was observed that the Noticee had expired before initiation of the present Adjudication Proceedings against him.

Taking this matter into consideration it was observed that the Noticee expired before the issuance of SCN and hence, an opportunity of personal hearing cannot be provided to the noticee Since the Noticee is non-est and the opportunity of being heard could not be provided to impose penalty the officer is of the view that the adjudication proceedings initiated against the Noticee do hold enough ground and are abated without going into the merits of the case. With this, no penalty is imposed on the Noticee who is deceased and the Adjudication Proceedings against the Noticee stands abated.

Click here to read the Order

Order reviewed by Naveen Sharma

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