sebi:Order/BM/GN/2022-23/24646

SEBI · SEBI · 1993-11-18 · Barnali Mukherjee, Adjudicating Officer

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Facts / Headnote

Ex-parte adjudication proceeding against the Noticee for alleged misutilization of clients' funds; final penalty not stated in the extract provided.

Provisions invoked

• s. 15
• s. 19
• s. 11(1)
• s. 12
• s. 15H
• s. 15B
• s. 15I
• s. 15J
• s. 23J
• s. 23
• s. 23D
• s. 20

Regulations

• Reg. 6
• Reg. 9(f)
• Reg. 9
• Reg. 3(2)

Parties

• S.B. Securities Private Limited

Holding

The Adjudicating Officer proceeded ex-parte against S.B. Securities Private Limited for alleged misutilization of clients' funds under Section 23D of the SCRA, 1956 read with applicable SEBI circulars, on the basis of material available on record after the Noticee failed to submit a reply or attend the hearing.

Full text

Adjudication order in the matter of S.B. Securities Private Limited Page 2 of 57 Associated Persons in the Securities Markets) Regulations, 2007, circulars issued by SEBI and notice issued by BSE. The extracts of the violation alleged to have been committed by the Noticees and corresponding provision of the securities law are given in the tabulation below:- S. No. Alleged violations Regulatory provisions 1 Misutilization of clients’ funds Section 23D of SC(R) Act, 1956 read with Clause 1 of Annexure of SEBI Circular SMD/SED/CIR/93/23321 dated November 18, 1993 and Clause 3 of Annexure of SEBI Circular SEBI/HO/MIRSD/MIRSD2/CIR/P/2016/95 dated September 26, 2016

Adjudication order in the matter of S.B. Securities Private Limited Page 3 of 57 APPOINTMENT OF ADJUDICATING OFFICER 5. SEBI, vide communiqué dated October 27, 2022, appointed the undersigned as the Adjudicating Officer under section 19 of the Securities and Exchange Board India Act, 1992 (hereinafter referred to as SEBI Act) read with sub-section (1) of Section 15I of the SEBI Act and Rule 3 of SEBI (Procedure for Holding Inquiry and Imposing Penalties) Rules, 1995 (hereinafter referred to as ‘SEBI Adjudication Rules’) and under section 23 I (1) of the Securities Contract Regulation Act, 1956 (hereinafter referred to as SCR Act) read with rule 3 of the Securities Contract (Regulation) (Procedure for Holding Inquiry and Imposing Penalties) Rules, 2005 (hereinafter referred to as SC(R) Rules) to inquire into and adjudge under the provisions of Section 23D of SCRA, 1956 and Section 15HB, 15B and 15F(c) of the SEBI Act for the violations alleged to have been committed by the Noticee. SHOW CAUSE NOTICE, REPLY AND HEARING

Adjudication order in the matter of S.B. Securities Private Limited Page 4 of 57 sought extension or submission of reply and adjournment of hearing till the end of January 2023, hence, extension was given to the Noticee for submission of reply till January 12, 2023 and the hearing date was given as January 16, 2023. However, further extension for submission of reply and adjournment of hearing was sought by noticee till 2nd week of February, 2023 on the ground that the person who is looking after the compliance is hospitalised. In view of the same, extension was given to the Noticee to file the reply by February 10, 2023 and fourth and final opportunity of hearing was given to the Noticee on February 13th, 2023. Vide email dated February 13, 2023, Noticee sought adjournment of hearing which was scheduled on February 13, 2023 on the medical ground and on telephonic conversation Mr. Ankush Choudhary sought adjournment for further 15 days. The request for extension for submission of reply and adjournment of fourth hearing scheduled on February 13th, 2023 was acceded to and the time was given for submission of reply till February 20th, 2023 and the fifth opportunity of hearing was given on February 27th, 2023. However, vide email dated February 23, 2023, Noticee further sought adjournment of the hearing scheduled on February 27, 2023 on the ground that their compliance officer Mr. Ankush Chaudhary is discharged from hospital on February 10, 2023 but he is advised by the doctor for

Source: SecMarx — sebi:Order/BM/GN/2022-23/24646. 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.