sebi:Order/BM/DS/2023-24/30012

SEBI · SEBI · 2023-12-19 · Barnali Mukherjee, Adjudicating Officer

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

Facts / Headnote

Violations partly established; monetary penalty of Rs. 1,00,000 imposed under Section 15HB

Provisions invoked

• s. 15
• s. 15H
• s. 15J
• s. 28A
• s. 23D

Regulations

• Reg. 6
• Reg. 9(f)
• Reg. 9

Parties

• Shree Bahubali Stock Broking Limited

Holding

The Noticee was held to have violated Clauses A(1) and A(2) of the Code of Conduct read with Regulation 9(f) in respect of declaration forms receipt-stamped prior to client submission dates and subsequently filling blank signed declaration forms, and was imposed a penalty of Rs. 1,00,000 under Section 15HB; the allegation of violation for common mobile/email IDs in case of non-individual clients with common director/Karta was not sustained.

Full text

Adjudication Order in the matter of Shree Bahubali Stock Broking Limited Page 2 of 15 3. SEBI initiated adjudication proceedings against the Noticee under section 15HB of SEBI Act, 1992 for the alleged violations of the provisions of Stock Brokers Regulations, 1992 and applicable SEBI Circular.

Adjudication Order in the matter of Shree Bahubali Stock Broking Limited Page 3 of 15 6.3. With regard to Client with UCC 2156, it was observed that the declared email id, i.e. gunmaladevisaraogi@gmail.com belonged to the client, whereas it was declared on the form that the email id belonged to dependent parents. 6.4. It was also observed that in respect of UCC 6861, 6862, 6863 and 6864, the name, place and date, details regarding whom the email id and mobile number were pertaining to, were not provided in the declaration form. It was alleged that the Noticee was collecting blank declaration forms with the signature of clients. Later, the Noticee submitted the scanned copies of the declaration forms pertaining to these clients, vide email dated August 25, 2023, in which, it was observed that the missing details had been subsequently filled in the forms by the Noticee itself, just before submitting the forms. Upon enquiring, the Noticee replied that the aforesaid missing details were filled-in by the Noticee in the declaration form for submission to SEBI. 6.5. With respect to non-individual clients with UCCs 1653, BJ827, 4427, 6969, 6061 and 5955, email-id/ mobile numbers of common director/ Karta were declared in the declaration forms. However, these clients were not individuals, and hence family declaration forms for common mobile numbers / email IDs was not applicable and thus, it was alleged that the Noticee has violated the provisions of SEBI Circular No. CIR/MIRSD/15/201

Adjudication Order in the matter of Shree Bahubali Stock Broking Limited Page 4 of 15 7.1. With respect to the observations observed against Client Codes 1653, 233, 6061 & 6094, the respective clients had submitted their declarations in advance with an instruction of processing the same at subsequent dates. Accordingly, the declarations in all these instances were processed as per clients' requisition dates. Therefore, no violation has been made by the Noticee. 7.2. With respect to Client Code 6094, the client Ayush Jain filled the declaration form with an understanding that he along with his father was using the same contact details. He interpreted the fact that the relationship in the declaration form was being submitted from his perspective and not from his parent's perspective. Similarly, with respect to Client Code 2156, the client Ms. Gunmala Devi Saraogi filled the declaration form with an understanding that she along with her son was using the same contact details. She interpreted the fact that the relationship in the declaration form was being submitted from her perspective and not from her son's perspective. Accordingly the Noticee does not concur with the observation, as the concerned form was filled by the clients themselves and there are no benefits that the Noticee could have derived on the basis of clients' individual interpretation. 7.3. With regards to the observations against Client Codes 6861, 6862, 6863 and 6864, these codes were pertaining to Corporate Cl

Source: SecMarx — sebi:Order/BM/DS/2023-24/30012. 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.