sebi:MO/06/MIRSD/05/06
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Facts / Headnote
Minor penalty imposed: suspension of certificate of registration for 15 days, effective on expiry of 21 days from the order
Provisions invoked
- s. 19
- s. 12
Regulations
- Reg. 13(4)
- Reg. 5(1)
- Reg. 13(2)
- Reg. 6
- Reg. 17(1)
- Reg. 17(1)(k)
Parties
- M/s. Subhash Baheti & Co.
Holding
The broker was held guilty of violating SEBI Circular dated February 11, 1997 (non-maintenance of order book), Regulation 17(1)(k) of the SEBI (Stock Brokers and Sub Brokers) Regulations, 1992 (non-maintenance of margin book), and the SEBI Circular dated November 18, 1993 (non-segregation of client/own funds), among other lapses, and a minor penalty of 15-day suspension of its certificate of registration was imposed.
Full text
Home » Enforcement » Orders » Orders of Chairman/Members Enforcement Enforcement▼ Order against M/s. Subhash Baheti & Co May 17, 2006 | Orders : Orders of Chairman/Members MO/06/MIRSD/05/06 SECURITIES AND EXCHANGE BOARD OF INDIA
submitted that the deficiencies have been rectified and enclosed copies of the same. The purpose of Regulations is not punitive but corrective in nature. As the broke necessary steps to correct the discrepancies, I am inclined to take a lenient view on the above lapse of the broker. d) Non segregation of client / own funds As per the inspection report, it is alleged that the broker has not maintained separate accounts for clients fund and its own funds and that the broker made certain payme electricity charges, telephone charges, printing and stationery expenses, motor car expenses, etc., from the clients accounts. The broker in its reply dated Septemb accepted its fault that it did not maintain separate accounts for clients funds and own funds. Hence the Enquiry Officer found the broker guilty of violating the SEBI C November 18, 1993. However, vide its reply dated November 15, 2004 which is subsequent to the Enquiry proceedings, the broker stated that it had always kept the c separately from its own funds and is also maintaining separate Bank Account for keeping the clients funds and due to some clerical mistakes, cheques were issued account, which cannot be accepted as a justification. The purpose of maintaining separate account is to avoid misuse of clients money and in this case the broker has a he used the client funds for his own payments. This should be viewed seriously.
as recommended by the Enquiry Officer should not be imposed on it. The broker was granted time upto November 15th, 2004 to submit its reply. The broker vide letter dated November 11, 2004 sought extension of time upto November 30, 2004 for filing its reply and replied vide letter dated November 15th, 2004. 4.0 CONSIDERATION OF ISSUES 4.1 I have carefully considered the findings of the Inspection, Enquiry and the
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Source: SecMarx — sebi:MO/06/MIRSD/05/06. 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.