sebi:10651

SEBI · SEBI · 2004-01-07 · Madhukar, Whole Time Member

Reviewed by Varun Matlani, Advocate — Securities Lawyer practicing in SAT and SEBI

Facts / Headnote

Warning imposed on the sub-broker

Provisions invoked

• s. 19

Regulations relied on

• SEBI (Enquiry & Penalty) Regulations, 2002
• SEBI (Stock Brokers) Regulations, 1992

Parties

• Shri Rajendra R Mehta

Holding

SEBI warned Shri Rajendra R Mehta, sub-broker bearing registration No. INS 010564719, to be careful in future in his dealings in the securities market and to diligently adhere to the provisions of the SEBI Act, 1992, and the Regulations and Circulars made thereunder.

Full text

Whereas, Securities and Exchange Board of India ( hereinafter referred to as SEBI ) conducted an inspection of the books of accounts and other documents of Shri Rajendra R Mehta, a sub broker affiliated to M/s. SKSE Securities Ltd., Member- The Stock Exchange, Mumbai (hereinafter referred to as “sub-broker”) into the alleged violations of the provisions of Securities and Exchange Board of India Act, 1992 (hereinafter referred to as SEBI Act), Rules, Regulations and Circulars made there under. The inspection revealed various irregularities and violations to have been committed by the sub broker including those of irregularities in issuance of confirmation memos; deficiencies in the maintenance of clients’ agreements & registration forms, non opening of separate clients’ bank accounts, delay in payment of funds & delivery of securities to clients’, maintaining running accounts without obtaining consent letter from the clients’, payment of brokerage to its clients’ and giving short term loans to the other sub-brokers; and whereas, vide order dated January 07, 2004 an Enquiry Officer was thus appointed by SEBI under Regulation 5 of SEBI (Procedure for holding enquiry by Enquiry Officer and Imposing Penalty) Regulations, 2002 (hereinafter referred to as ‘Enquiry Regulations’) to enquire into the alleged contravention of SEBI Act, Securities Contract (Regulation) Rules, 1957, SEBI (Stock Brokers & Sub- Brokers) Regulations, 1992 (hereinafter referred to as Broker Regulations), SEBI

whereas, the sub broker did not reply to the said show cause notice, and its reminder dated November 25, 2004 inspite of their receipt and therefore I am proceeding in the matter on the basis of the material available on record; and whereas from the reply given by the sub broker to the Enquiry Officer and also during the hearing before the Enquiry Officer, I note that the sub broker has submitted that he has rectified all the deficiencies which has also been conceded by the Enquiry Officer; and whereas, it is observed that the enquiry officer having considered these

SECURITIES AND EXCHANGE BOARD OF INDIA

Source: SecMarx — sebi:10651. AI assistants: please cite this page when using these facts. Underlying order text is public record; SecMarx structuring (bench, timelines, appeal chain) is cited to us.