sebi:SD/AO/36/2011
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Facts / Headnote
Penalty of Rs.5,00,000 imposed under Section 15HB of SEBI Act, 1992
Provisions invoked
- s. 15
- s. 15H
- s. 15J
- s. 18
Regulations
- Reg. 26
Parties
- M/s. Mansukh Securities and Finance Limited
Holding
The Noticee violated Regulations 26(xii), 26(xiii), 26(xv) and 26(xvi) of Brokers Regulations and related SEBI Circulars and Rule 8(1)(f) and 8(3)(f) of SCR Rules, and is liable for monetary penalty under Section 15HB of SEBI Act, with penalty of Rs.5,00,000 imposed.
Full text
Page 2 of 19 failure on the part of Notiicee to issue contract note in the form and manner specified by the exchange (i) failure on the part of Noticee to maintain client agreements, client registration forms, KYC Forms and various documents in a manner specified by exchange and SEBI. Therefore, it was alleged that Noticee had violated the provisions of SEBI (Stock Brokers and Sub Brokers) Regulations, 1992 (hereinafter referred to as ‘Brokers Regulations’), Securities Contract (Regulations) Rules, 1957 (hereinafter referred to as ‘SCR Rules’), Rule 4(b) of SEBI (Stock Brokers and Sub-Brokers) Rules, 1992 (hereinafter referred to as Stock Broker Rules), Clause A(5) of Code of Conduct for Stock Brokers Regulations, certain SEBI Circulars and consequently, liable for monetary penalty under sections 15HB of the Securities and Exchange Board of India Act, 1992 (hereinafter referred to as the ‘SEBI Act’).
Page 3 of 19 appear on April 05, 2010 but the Noticee further sought an adjournment and in the interest of natural justice, last opportunity of personal hearing was granted to the Noticee on May 04, 2010. On this date Mr. Ketan Rupani and Mr. Kamal Punjabi, Authorised Representatives of the Noticee (hereinafter referred to as “AR”), appeared before me and reiterated the submissions made in the reply dated November 12, 2007 and submitted inter-alia that there were technical lapses and if looked into totality the amounts involved were insignificant and in all the cases adequate steps were taken to rectify the same. They further submitted that there were no specific client complaints. The Noticee vide its letter dated May 07, 2010 submitted additional reply to the SCN and the same has been considered by me.
Page 4 of 19 commodities derivatives as principal. The said Rule does not prohibit transfer of funds between group companies. Further, transactions between us and Mansukh Commodity Futures Pvt. Ltd. are also not prohibited since these were on account of transfer of funds between the accounts of common clients at their instructions. On perusal of the entries in the ledger account, apparently there is no fund based activity as alleged but there are receipts and payment of money to and fro in the ledger account maintained on open, mutual and current account basis.
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Source: SecMarx — sebi:SD/AO/36/2011. 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.