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CS Executive · Capital Market and Securities Laws · Prohibition of Fraudulent and Unfair Trade Practices relating to Securities Market

A person made a profit of Rs 4 crore through fraudulent and unfair trade practices relating to securities. Considering Section 15HA, which statement about the penalty range is correct?

The penalty is not less than Rs 5 lakh and may extend to Rs 25 crore. Three times the Rs 4 crore profit is Rs 12 crore, which is lower than Rs 25 crore, and Section 15HA takes whichever is higher as the ceiling.

  1. ANot less than Rs 5 lakh and may extend up to Rs 25 crore, since three times profit (Rs 12 crore) is lowerCorrect
  2. BNot less than Rs 5 lakh and may extend up to Rs 12 crore, since profit-based amount applies
  3. CNot less than Rs 12 crore and up to Rs 25 crore
  4. DNot less than Rs 10 lakh and up to Rs 25 crore

Explanation

Three times Rs 4 crore is Rs 12 crore, which is below Rs 25 crore. The ceiling is the higher figure, Rs 25 crore. The floor remains Rs 5 lakh. Capping at Rs 12 crore wrongly takes the lower amount.

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