Order in respect of Sri Sunil Laxman Kale

UNDER SECTION 11(4), 11B AND 11D OF THE SECURITIES AND EXCHANGE BOARD OF INDIA ACT, 1992 IN RESPECT OF SRI SUNIL LAXMAN KALE (SUB- BROKER REGISTRATION NUMBER INS233483614 AND INS013450411) Appearances: For Noticee: Sri Sunil Laxman Kale Smt. Swati Kale For SEBI: Mr. Santosh Kumar Shukla, Joint Legal Adviser Ms. Medha Sonparote, Deputy General Manager Mr. Ashish Kumar, Assistant General Manager Mr. Durgesh Kumar Thakur, Assistant Legal Adviser 1. Sri Sunil Laxman Kale is registered with Securities and Exchange Board of India (hereinafter referred to as “SEBI”) as a sub-broker (Sub-broker Registration Nos. INS233483614 and INS013450411) affiliated to the stock-broker, India Infoline Ltd (hereinafter referred to as "IIFL"). He is also the founder/director of Trendline Traders Academy (hereinafter referred to as "Trendline"). 2. SEBI noticed an advertisement published by Sri Sunil Laxman Kale in Sakal newspaper (a Marathi newspaper) dated April 28, 2013 claiming to double the money invested by an investor through him in a year's time. It was further noted that he had also hosted a website www.realtime-trading-system.com wherein representations were made guaranteeing returns to investors. It was prima facie observed that the services represented by Sri Sunil Laxman Kale and Trendline in the above mentioned advertisement and website were in the nature of portfolio management services. On the basis of prima facie findings that activities of Sri Sunil Laxman Kale and Trendline were in contravention of provisions of section 12(1) of the Securities and Exchange Board of India Act, 1992 and regulation 3 of the Securities and Exchange Board of India (Portfolio Managers) Regulations, 1993 and section 12A (a) (b) and (c) of the SEBI Act and regulation 3 (b), (c) and (d) and regulation 4(1) and 4(2) (k) of the Securities and Exchange Board of India (Prohibition of Fraudulent and Unfair Trade Practices relating to Securities Market) Regulations, 2003, SEBI, vide an ex parte order dated November 18, 2013, (hereinafter referred to as the 'Order') issued the following directions: (a) Sri Sunil Laxman Kale and Trendline were restrained from accessing the securities market and further prohibited from buying, selling or otherwise dealing in securities, directly or indirectly, or being associated with the securities market in any manner;

(b) Sri Sunil Laxman Kale and Trendline were directed to cease and desist from undertaking the portfolio management activities or any unregistered activity in the securities market, directly or indirectly, in any manner whatsoever; (c) Sri Sunil Laxman Kale and Trendline were directed to immediately withdraw and remove all advertisements, representations, literatures, brochures, materials, publications, documents, websites, etc. in relation to the portfolio management activities or any unregistered activity in the securities market; and (d) Sri Sunil Laxman Kale and Trendline were prohibited from mobilizing funds from the public or offering any portfolio management activities, in whatever form. 3. Sri Sunil Laxman Kale and Trendline (hereinafter referred to as the "Noticees) were further advised by the Order that they may file their objections, if any, within twenty one days from the date of the Order and, if they so desire, may avail an opportunity of personal hearing in the matter. Sri Sunil Laxman Kale vide his email dated November 22, 2013 requested that he may be allowed to close his open positions in F&O segment.

Considering his request, SEBI advised the stock exchanges, viz. BSE Ltd & National Stock Exchange to enable squaring off for any existing open positions of Sri Sunil Laxman Kale in the F&O segment. Sri Sunil Laxman Kale vide email dated November 30, 2013 submitted his reply. He also attended the personal hearing in the matter on December 17, 2013 alongwith with his wife Smt. Swati Kale and made submissions for himself and on behalf of Trendline. The submissions of the Noticees are as under: (a) The activities alleged in the Order happened due to mistake and non-understanding and ignorance of rules and regulations of SEBI. Sri Sunil Laxman Kale had a rural background and completed his education by selling vegetables. He is a small and occasional trader and has no experience of market in detail. He has lost money while trading and whatever he could save he has been using for the benefit of small investors. Sri Sunil Laxman Kale has written three short books on stock market or financial market for education of common, especially small investors. (b) Presently, Sri Sunil Laxman Kale is a patient of Cerebral Ataxia and has difficulties in speaking, walking and writing.

(c) It was not the intent of Sri Sunil Laxman Kale to earn monies out of any activities alleged. He never intended to cheat any person and cannot even dream to do so. His intent was only to bring awareness for the investors and common people. (d) The Noticees have not done any activities in the nature of portfolio management services in the past and will not do so in future. The Noticees have not collected any funds from any investor for providing any portfolio management services to the investors. The Noticees did not do anything wrong to the investors and they never intended to do so.

(e) They had promptly removed the contents which have been noticed objectionable by SEBI from his website immediately when explanation was sought by SEBI before the Order was passed. (f) The Noticees have regretted for the same and expressed apologies for the same. The Noticees have promised not to do such activities, directly or indirectly, in future and requested for revocation of directions issued against them. 4. I have carefully considered the allegations leveled against the Noticees in the Order, their replies and submissions and relevant material available on record. It is admitted fact that the Noticees have not raised any money from the investors towards any activity as prima facie found in the Order. The advertisement and the representations on the website as noted in this case are the solitary instance when the Noticees have made representations with regard to such activities. I also take note of the fact that the objectionable contents of the website of the Noticees had been removed immediately when SEBI had pointed out the same to them. The Noticees have not got any client on the basis of such representations.

In view of the facts and circumstances of the case and considering the background of Sri Sunil Laxman Kale, it appears that the Noticees did not intend to cause any harm to the investors or securities market and the advertisement and representations on website in question might have been made by Sri Sunil Laxman Kale, being involved in his academic pursuit as mentioned in para 3(a) above, merely out of curiosity and enthusiasm and without properly appreciating the regulatory requirements. In this case, the Noticees have already undergone the debarment for a period of about one and half month which in my view is commensurate with the prima facie violations as found in the Order keeping in mind the facts and circumstances of this case especially the background of Sri Sunil Laxman Kale as mentioned above and the fact that no injury has been caused to investors by his actions. 5. In view of the above, I do not deem it necessary to continue the prohibitions and debarments contained in para 11(i) of the Order dated November 18, 2013 against the Noticees and direct them to cease and desist from undertaking, directly or indirectly, any unregistered activity including the unregistered portfolio management activities as provided in section 12 of the SEBI Act, in any manner whatsoever.

They are further advised to take utmost care and be vigilant while dealing in the securities market. 6. A copy of this Order shall be served on NSE, BSE, NSDL, CDSL and India Infoline Ltd. for appropriate action.

DATE: December 31st, 2013 RAJEEV KUMAR AGARWAL PLACE: MUMBAI WHOLE TIME MEMBER SECURITIES AND EXCHANGE BOARD OF INDIA