sebi:Order/SM/AR/2018-19/2439
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Facts / Headnote
Noticee found liable for multiple violations; penalty imposed (amount not specified in provided text); discharged on certain allegations
Provisions invoked
- s. 15
- s. 19
- s. 12(1)
- s. 12
- s. 15J
- s. 23J
- s. 15F
- s. 23
- s. 23H
- s. 209
Regulations
- Reg. 7
- Reg. 12(1)
- Reg. 3
- Reg. 12
- Reg. 17(2)
- Reg. 7A(2)
Parties
- M/s Pee Dee Kapur Stock & Securities Limited
Holding
The Noticee was held liable for violations including indulging in fund-based business activity, unauthorized margin funding through associate company Perpetual Finvest Lease Pvt. Ltd., third party deliveries, incomplete/misleading client registration forms, and failure to frame insider trading code. The Noticee was discharged on allegations related to dealing with unregistered sub-brokers, mixing client securities, place of maintenance of books, cash withdrawals, misuse of client accounts, and shifting of client codes.
Full text
Page 2 of 48 office address which is located at 802, International Trade Tower, Nehru Place, New Delhi-110019. 2. During the course of inspection and upon examination of various records, it was observed by SEBI that Noticee had committed certain irregularities/violations while functioning as a stock broker of NSE (SEBI Reg No. INB231185134). Based on the findings of the inspection and the observations contained in the Inspection Report (hereinafter referred to as ‘IR’), it was alleged that Noticee has violated the provisions of SEBI Act, 1992 (hereinafter referred to as ‘SEBI Act’), Securities Contract (Regulation) Act, 1956 (hereinafter referred to as ‘SCR Act’), Securities Contract (Regulation) Rules, 1957 (hereinafter referred to as ‘SCR Rules’), SEBI (Stock Brokers and Sub-Brokers) Regulations, 1992 (hereinafter referred to as ‘Stock Broker Regulations’) and also the various provisions of SEBI Circulars and Stock Exchange Circulars / instructions that were issued from time to time. In view of the above allegations/findings against the Noticee, adjudication proceedings were initiated against the Noticee under the provisions of sections 15F & 15HB of SEBI Act and also under section 23 H of SCR Act. APPOINTMENT OF ADJUDICATING OFFICER
Page 3 of 48 Subsequently, I have been appointed as the Adjudicating Officer in the matter, vide an Order dated June 22, 2015. SHOW CAUSE NOTICE, REPLY AND PERSONAL HEARING:
Page 4 of 48 Rule 4(b) of SEBI (Stock Brokers & Sub Brokers) Rules, 1992 and provisions of para A(5) of Schedule II specified under Regulation 7 of SEBI (Stock Brokers and Sub Brokers) Regulations, 1992. e. Have routed the funds for clients' transactions through group company Perpetual Finvest Lease Pvt. Ltd. Which has resulted in violation of SEBI Circular No. SEBI/MRD/SE/SU/Cir-15/04 dated March 19, 2004. f. Have entered into large movements of funds with its group companies without any corresponding securities transactions giving the appearance of indulging in fund based activities in violation of Rule 8(1) (f) and 8 (3)(f) of SCR Rules, 1957. g. Have included misleading statements in the Client Agreement forms which has resulted in the violation of clause A(2) of the Code of Conduct specified under Regulation 7 of SEBI (Stock Brokers & Sub- brokers) Regulations, 1992. h. Have committed irregularities in the Client Registration forms and agreements in violation of SEBI Circular No. SEBI/MIRSD/DPS-1/Cir- 31/2004 dated August 26,
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Source: SecMarx — sebi:Order/SM/AR/2018-19/2439. 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.