In Brief
This group of Supreme Court appeals addresses the standard of proof required to hold stock brokers and sub-brokers liable for manipulative trading and violations of securities regulations. The Court held that fraudulent or manipulative practices under the FUTP Regulations can be proven through circumstantial evidence meeting the preponderance of probabilities standard, without direct proof. Liability arises when brokers engage in or facilitate synchronized trades in illiquid scrips with minimal time gaps, huge volumes, and no genuine settlement—demonstrating either negligence (breach of Code of Conduct) or deliberate manipulation (FUTP violation) depending on extent. The Court dismissed one appeal and allowed others, restoring penalties against brokers for synchronized trading in illiquid securities despite the brokers' argument that screen-based trading prevents knowledge of counterparties.
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