sebi:WTM/SM/NRO/NRO/18678/2022-23

SEBI · SEBI · S. K. Mohanty, Whole Time Member

Reviewed by Varun Matlani, Advocate — Securities Lawyer practicing in SAT and SEBI

Facts / Headnote

Proceedings disposed of without any direction against the Noticees; allegations of violation of PFUTP Regulations not sustained.

Provisions invoked

• s. 19

Regulations relied on

• SEBI (PFUTP) Regulations, 2003 — 4(1)
• SEBI (PFUTP) Regulations, 2003 — 4(2)(m)
• SEBI (PFUTP) Regulations, 2003 — 4(2)(o)

Parties

• Rahul Raghav / Nitus Solution Pvt. Ltd.
• Bhanu Pratap Singh

Holding

The allegations of unauthorized trading and failure to provide relevant information against the Noticees under the PFUTP Regulations were not sustained, and the proceedings were disposed of without any direction.

Full text

__________________________________________________________________________________ Final Order in the matter of Complaint by Ms. Neerja Ahluwalia and Others Page 1 of 19 WTM/SM/NRO/NRO/18678/2022-23

__________________________________________________________________________________ Final Order in the matter of Complaint by Ms. Neerja Ahluwalia and Others Page 2 of 19 2.1. MCSL is a registered stock broker having SEBI Registration No. INZ000210539. Its registered office is at A - 852 - A, Basement, Sushant Lok, Phase - 1, Gurugram, Haryana-122002 2.2. Noticee No. 2 had joined MCSL in September 2015 and had worked only for 20-25 days as VP - HNI Sales. His email id with master trust domain name was created by MCSL during this time. In 2015, Noticee No. 1 joined MCSL as Authorised Person (hereinafter referred to as “AP”) in the name of Rahul Raghav. He worked as AP of MCSL till January 2017. 2.3. Thereafter, a company called Nitus Solution was incorporated and Noticee No. 1 was the initial Promoter and Director in the said company. In January 2017, after Nitus Solution was incorporated, Noticee No. 1 surrendered his AP registration with MCSL in his individual capacity and Nitus Solution was registered as AP with MCSL through which Mr. Rahul Raghav operated. 2.4. Ms. Neerja Ahluwalia had opened her trading account with MCSL in September 2015 while the other complainants had opened their account subsequently. 2.5. MCSL has though submitted that the authorized representatives of the complainants i.e. Noticee No. 2 and one Mr. Milan Sharma used to place orders in their accounts, however, no document was furnished in support thereof. Materials gathered in the course of examinatio

__________________________________________________________________________________ Final Order in the matter of Complaint by Ms. Neerja Ahluwalia and Others Page 3 of 19 this, total brokerage of INR 2.16 crore, it has paid INR 1.69 crore to the AP (Noticee No. 1 and Nitus Solution). 2.8. Further, it was noticed that Noticee No. 1 used to give trade details of Ms. Neerja Ahluwalia to Noticee No. 2, who used to provide the same to Ms. Neerja Ahluwalia. From the client registration documents of Ms. Neerja Ahluwalia, it was noted that Noticee No. 2 was her introducer and while introducing the client, he was declared as an AP in the KYC. From the information furnished by MCSL, it was observed that Noticee No. 2 was neither AP/sub-broker/client of MCSL nor an employee of MCSL. 2.9. It was noted that Ms. Neerja Ahluwalia and Ms. Poonam Verma had not made any fund pay-in to the stock broker while the other complainants viz: Mr. Anmol Maria, Ms. Arti Maria, Dr. Jyoti K. Mahajan and Ms. Puneeta Mahajan had made fund pay-in only 1-2 times. The debit balances in their accounts were settled through sale of their securities or squaring off their positions in derivatives. 2.10. The complainants were regularly receiving contract notes, bills, quarterly financial statements, SMS regarding transactions in their accounts from MCSL. Further, the Depositories have also confirmed that regular CAS statements were being sent to the complainants. The complainants have not denied receipt of these stat

Source: SecMarx — sebi:WTM/SM/NRO/NRO/18678/2022-23. 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.