Mumbai: Indiabulls Securities has settled a case related to alleged non-compliance of stock broker norms after payment of Rs one crore to the market regulator Sebi as consent settlement charges.
The Securities and Exchange Board of India (Sebi) had begun adjudications proceedings against Indiabulls Securities in relation to certain alleged irregularities by the stock broker.
However, the regulator has now agreed to dispose off the pending adjudication proceedings after a consent settlement.
The regulator's inspection of Indiabulls Securities' records during November 2006 had found certain irregularities in the broker's business operations such as failure to maintain proper records pertaining to investor complaints and appointment of unregistered sub brokers in the guise of "marketing associates".
While adjudication proceedings were in progress, the broker made a proposal to settle the matter on payment of Rs one crore under Sebi's consent order mechanism.
Subsequently, the proposed consent terms and settlement amount were approved by Sebi's High Powered Advisory Committee (HPAC) as well as by a panel of the regulator's whole time members, following which Indiabulls remitted the amount.
Among others, Indiabulls was alleged of allotting multiple client codes, charging higher interest for margin trading from clients than the rate mentioned in the agreement and of financing clients' transactions by providing its own funds as well as by obtaining funds from its group companies.
Sebi however said that further enforcement actions, including commencing or reopening of these proceedings, could be initiated if any representation made by the broker is found to be untrue.
Under consent mechanism, entities can seek to settle cases with the regulator after payment of certain charges and and other expenses without admission of guilt.
