Law:

Section:

Securities and Exchange Ordinance (XVII of 1969)------- --------S. 22-------Brokers and Agents Registration Rules, 2001, Rr.8 & 12, Third Sched., Code of Conduct, Cls. A(1), A(2), A(5) & B(6)-------Buying and selling the shares of companies and earning quick profit, by contravening Code of Conduct-------Broker/company's client, bought off 50,000 shares of two companies at the rate of Rs.285; subsequently, within a minute, said client sold said shares at Rs.300 through the company, and earned a quick profit of Rs.750,000-------Such transaction, having raised ambiguity regarding the fairness on the part of the company, show-cause notice was issued to the company-------Director of the Commission, after hearing arguments of the Managing Director of the company, held that, the company violated Cls. A(1), A(2), A(5) & B(6) of the Code of Conduct set forth under the Third Schedule of Brokers and Agents Registration Rules, 2001, which in term was a violation of Rr.8 & 12 of Rules of 2001-------Director, exercising powers under S.22 of the Securities and Exchange Ordinance, 1969, imposed a penalty of Rs.1,000,000 on the company; and company was directed to ensure that full compliance by made of all Rules, Regulations and Directives of the Commission in future for avoiding any punitive action under the law-------Validity-------Penalty under Securities and Exchange Ordinance, 1969, could only be imposed, if the person, upon whom penalty was being imposed, had intended to breach any provision of law-------In the present case, one had to determine, whether or not the act had been intentionally and deliberately done and not by accident or inadvertence-------One must also determine; whether the company had essentially violated any provision of the Securities and Exchange Ordinance, 1969 or not before imposing a penalty under S.22 of the Securities and Exchange Ordinance, 1969-------Impugned order was set aside, in circumstances. THIS ORDER PASSED BY: TAHIR MAHMOOD, COMMISSIONER CLD AND FIDA HUSSAIN SAMOO, COMMISSIONER INSURANCE:------ 1. This order is in Appeal No. 06 of 2013 filed under section 33 of the Securities and Exchange Commission of Pakistan (the…

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