sebi:EAD-8/KS/AA/AO/158/2018-19
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Facts / Headnote
Penalty of Rs. 1,00,000 imposed on the Noticee
Provisions invoked
- s. 15
- s. 12
- s. 15H
- s. 15J
- s. 15F
- s. 23J
- s. 23
- s. 23D
Regulations
- Reg. 6
- Reg. 9(f)
- Reg. 26
Parties
- Vedika Securities (P) Limited
Holding
The Noticee violated SEBI Circular No. SMD/SED/CIR/93/23321 dated November 18, 1993 and Clause A(5) of the Code of Conduct read with Regulation 9(f) of the Brokers Regulations. A penalty of Rs. 1,00,000 was imposed on Vedika Securities (P) Limited under Section 15HB of the SEBI Act and Section 23D of the SCRA.
Full text
Page 2 of 9 APPOINTMENT OF ADJUDICATING OFFICER 3. SEBI appointed Shri Suresh Gupta as the Adjudicating Officer vide communique dated October 06, 2017 to inquire into and adjudge under Section 15HB of the SEBI Act, 1992 (hereinafter referred to as ‘SEBI Act’) and under Section 23D of the Securities Contract Regulation Act, 1956 (hereinafter referred to as ‘SCRA’) read with Regulations 26(xiii), 26(xv) & 26(xvi) of the Brokers Regulations, the aforesaid violations alleged to have been committed by the Noticee. Pursuant to superannuation of Shri Suresh Gupta, the Competent Authority, vide appointment order dated April 26, 2018, appointed the undersigned as the Adjudicating Officer in the instant matter.
Page 3 of 9 funds were regularly moved from client accounts to self-account and vice versa. Therefore, it was noted that the clients’ funds were mixed with own/ borrowed fund by the Noticee. Moreover, as the said practice was a continuous practice, it could not be ascertained whether on a particular day, funds of a client having credit balance were being used to meet the obligation of other client(s) having debit balance(s).
Page 4 of 9 8. In the interest of natural justice, an opportunity of hearing was provided to the Noticee on July 04, 2018 vide hearing notice dated June 25, 2018. Shri Ayush Changoiwalla, Compliance Officer of the Noticee, appeared as the Authorized Representative (‘AR’) on behalf of the Noticee in the hearing on July 04, 2018. The AR reiterated the submissions given by the Noticee in its reply dated June 15, 2018. The AR also stated that the settlement obligations for clients as well as proprietary accounts are majorly met by routing of funds through the proprietary bank account of the Noticee.
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Source: SecMarx — sebi:EAD-8/KS/AA/AO/158/2018-19. 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.