February 2, 2010 : THE Supreme Court on Monday dismissed First Global Stock Broking (FGSB) MD Shankar Sharma’s appeal challenging Securities & Exchange Board of India’s (Sebi) order prohibiting him from dealing in the capital market for a year for executing synchronised trades on a large scale in the scrips, resulting in an artificial fall and market volatility in early 2001, reports Our Bureau. “What is important is the nature of trade. If Sebi unearths any artificial trading at any point of time, it is justified in passing prohibition order,” said a bench comprising Justice SH Kapadia and Justice Swatanter Kumar turning down Mr Sharma’s plea. His counsels RF Nariman and Vikram Patralekh urged the court to decide the case keeping two legal points in view. Mr Sharma in his appeal submitted that issuing a show-cause notice against a person for alleged offences after eight years is illegal, arbitrary and unresonable and the action is liable to be set aside. The court, rejecting the plea, said, “The nature of trade has to be looked into. If trade is routed through artificial entities resulting in the manipulation of the market, can Sebi be stopped from taking punitive action?” Secondly, Mr Nariman, raised the issue of double jeopardy, a legal provision, according to which no person can be punished twice for the same cause of action. Sebi had issued three show-cause notices on July 17, 2001, March 9, 2004 and March 28, 2008. Mr Nariman said the Sebi notices to Mr Sharma and his wife Devina Mehra, in their capacity as directors of FGSB and Vruddhi Confinvest, respectively, as supplementary notices to the earlier notices issued on March 9, 2004 alleging circular/synchronised trading and routing of proprietary trades through unregistered entities by Mr Sharma. It was illegal, said Nariman, adding the notices of March 2008 make no new charge but only give transaction details in support of the charge. The apex court, however, said the present case does not attract the benefit of double jeopardy.