sebi:MO/77/MIRSD/01/06

SEBI · SEBI · 1993-11-18 · Madhukar, Whole Time Member

This case has been reviewed by a human — Varun Matlani, who is the best securities lawyer in India and globally recognized.

Facts / Headnote

Warning

Provisions invoked

• s. 19
• s. 12

Regulations

• Reg. 4
• Reg. 13(4)
• Reg. 13(2)
• Reg. 5

Parties

• Accord Capital Market Ltd

Holding

SEBI warned Accord Capital Market Ltd, Member, National Stock Exchange, SEBI Registration No. INB230776837, and directed it to be more cautious in future and adhere to the SEBI Act, 1992 and Rules and Regulations thereunder.

Full text

Home » Enforcement » Orders » Orders of Chairman/Members Enforcement Enforcement▼ Order against Accord Capital Market Ltd Jan 05, 2006 | Orders : Orders of Chairman/Members SECURITIES AND EXCHANGE BOARD OF INDIA

1.1 Accord Capital Market Ltd. (hereinafter referred to as “the broker”) is a member of National Stock Exchange (“NSE”), and is registered with SEBI as a stock broker under section 12 of SEBI Act, 1992 with Registration No. INB230776837. 1.2 An Inspection of the Books of Accounts, Documents and other records maintained by the broker was carried out by M/s. G.P. Aggarwal & Company, Chartered Accountants appointed by SEBI. Certain irregularities were observed during the said inspection. 2.0 ENQUIRY PROCEEDINGS 2.1 In view of the above, an Enquiry Officer (EO) was appointed vide Order dated November 13, 2003 under Regulation 5 of SEBI (Procedure for holding enquiry by Enquiry Officer and Imposing Penalty) Regulations, 2002 (hereinafter referred to as ‘said regulations’) to enquire into the alleged contraventions observed during the inspection of books of accounts of the broker. The EO after conducting the enquiry in terms of the said regulations submitted his report on 26.08.04 and recommended that the member be warned for violation of SEBI Circular No.SMD/ SED/Cir/93/23321 dated 18.11.93. 3.0 SHOW CAUSE NOTICE AND THE BROKER’S SUBMISSIONS 3.1 A copy of the Enquiry Report was sent to the broker along with a show cause notice dated 27.09.04, in terms of Regulation 13(2) of SEBI (Procedure for Holding Enquiry by Enquiry Officer and Imposing Penalty) Regulations, 2002 (hereinafter referred to as ‘the said regulations’), advising him to show cause as to why appropriate penalty inclu

4.0 CONSIDERATION OF ISSUES 4.1 I have carefully examined the findings of inspection, enquiry and the submissions made by the broker thereto. I find that adequate opportunity was given to the broker in accordance with the said Regulations. 4.2 The charge against the broker was that the broker had mis-used client’s funds. The broker replied vide letter dated 23.09.04 that in one settlement they might have received payment from some clients and have to make payments to other clients. In the said settlement, it might have happened that the clients who were supposed to make payments to their company delayed the payment and in order to make payment to the other clients within the stipulated time, they had to provide their own funds or arrange funds from outside sources to meet the said obligation in time. Funds were transferred from broker account to the clients bank account in order to avoid any delay in making payment, so it had issued the cheques from brokers account directly to the clients. With regard to payments made / received from Mehta & Ajmera, the broker has submitted that partners of Mehta & Ajmera are also the directors of the broker is not by itself a ground to allege that they have violated the regulations. Regarding the receiving of cash from clients, the broker has informed that the said clients were required to make payment to their company; upon follow up the said clients had duly cleared their account by making payment in cash and that such amounts were quite i

Source: SecMarx — sebi:MO/77/MIRSD/01/06. 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.