sebi:Order/KS/AA/2020-21/7565
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Facts / Headnote
Violations established; penalty of Rs. 5,00,000 imposed (Rs. 3,00,000 under Section 23D of SCRA and Rs. 2,00,000 under Section 15HB of SEBI Act)
Provisions invoked
- s. 15
- s. 12A
- s. 12
- s. 15H
- s. 15J
- s. 15F
- s. 28A
- s. 23J
- s. 23
- s. 23D
Parties
- Ambalal Shares and Stocks Pvt. Ltd.
Holding
The Noticee Ambalal Shares and Stocks Pvt. Ltd. was found to have violated Section 23D of SCRA read with Clause 1 of Annexure to SEBI Circular SMD/SED/CIR/93/23321 dated November 18, 1993 and Clause(s) 2.4, 2.5, 2.5.5 and 3 of Annexure to SEBI Circular SEBI/HO/MIRSD/MIRSD2/CIR/P/2016/95 dated September 26, 2016, SEBI Circular MIRSD/SE/Cir-19/2009 dated December 03, 2009, Clause 2.6 of Annexure to SEBI Circular SEBI/HO/MIRSD/MIRSD2/CIR/P/2016/95 read with Clause 2(d) of SEBI Circular CIR/HO/MIRSD/MIRSD2/CIR/P/2017/64 dated June 22, 2017, and SEBI Circular CIR/MIRSD/16/2011 dated August 22, 2011. A total penalty of Rs. 5,00,000 was imposed.
Full text
Page 2 of 27 comprehensive joint inspection of the broking and depository participant operations of Ambalal Shares and Stocks Pvt. Ltd. (hereinafter referred to as “ASSPL / Noticee”). The period of inspection was from April 01,2017 to January 31, 2019 (hereinafter referred to as “IP”).
Page 3 of 27 APPOINTMENT OF ADJUDICATING OFFICER 3. The undersigned was appointed as the Adjudicating Officer vide communique dated December 19, 2019 to conduct adjudication proceedings in the manner specified under Rule 4 of SEBI (Procedure for Holding Inquiry and Imposing Penalties) Rules, 1995 (hereinafter referred to as “SEBI Adjudication Rules”) and Rule 4 of Securities Contracts (Regulation) (Procedure for Holding Inquiry and Imposing Penalties) Rules , 2005 (hereinafter referred to as “SEBI Adjudication Rules”) for the above alleged violations committed by the Noticee.
Page 4 of 27 A. Mis-utilization of clients’ funds (a) During inspection, based on the principles and guidelines stipulated in clause 3 of “Enhanced Supervision of Stock Brokers/Depository Participants” circular dated September 26, 2016, reconciliation of clients’ funds lying with the Noticee was done with the total available funds, i.e., cash and cash equivalents to detect any mis-utilization of clients’ funds for 25 sample dates. Total funds available with the Noticee, i.e., fund balance available in the client bank accounts and settlement account maintained by the Noticee (Column A of Table 1 below) and collateral deposited by the Noticee with the exchanges/ clearing corporation/ clearing member (Column B of Table 1 below) was verified from bank statements and daily margin statements respectively.
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Source: SecMarx — sebi:Order/KS/AA/2020-21/7565. 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.