sebi:WTM/VKC/MIRSD/06/3/08

SEBI · SEBI · 2002-12-18 · V.K. Chopra, Whole Time Member

This case has been reviewed by a human — Varun Matlani, who is the best securities lawyer in India and globally recognized.

Facts / Headnote

Penalty of suspension of registration for one month imposed on the broker

Provisions invoked

• s. 19
• s. 12

Regulations

• Reg. 7
• Reg. 13(4)
• Reg. 13(2)
• Reg. 5
• Reg. 23
• Reg. 18A
• Reg. 6(1)
• Reg. 18
• Reg. 10
• Reg. 17(1)(a)
• Reg. 21
• Reg. 23(1)

Parties

• T.G.Financial Consultants Pvt. Ltd.

Holding

The broker T.G.Financial Consultants Pvt. Ltd. was held guilty of violating multiple SEBI circulars and regulations including those relating to contract notes, margins, member-client agreements, off-floor transactions, segregation of funds, sauda book maintenance, unique client codes, and transfer of securities, and a penalty of suspension of registration for one month was imposed.

Full text

APPEARANCE : FOR NOTICEE : Mr.Sarvesh Dubey, Authorised Person FOR SEBI : Shri P. K. Kuriachen, General Manager ORDER (UNDER REGULATION 13(4) OF SEBI (PROCEDURE FOR HOLDING ENQUIRY BY ENQUIRY OFFICER AND IMPOSING PENALTY) REGULATIONS, 2002) 1.1 T.G.Financial Consultants Pvt. Ltd. (hereinafter referred to as “the broker”) is a member of the Uttar Pradesh Stock Exchange (“UPSE”) registered with SEBI as a stock broker under section 12 of SEBI Act, 1992 with SEBI Registration No. INB100978235. 1.2 Inspection of the books of accounts, documents and other records maintained by the broker for the period from February, 2001 to September 2002 was carried out by

to enquire into the alleged contraventions observed during the inspection of books of accounts of the broker. 2.2 A show cause notice dated 22.03.2004 in terms of Regulation 6(1) of the said Regulations was issued to the broker. The broker vide its letter dated 27.04.2004 submitted its written reply. 2.3 As per the request of the broker, an opportunity of personal hearing was given to the broker by the EO on 30.08.2004 which was attended by Mr.Madhu Dubey, the Director of the broker, who made oral submissions reiterating the written

· It had already stopped its trading activity in the UPSE and gave a undertaking that it will not resume trading activity before ensuring about non occurrence of any such contravention as alleged. 3.3 An opportunity of personal hearing before me was given to the broker on 25.07.2006. Mr. Sarvesh Dubey, the authorized person of the broker appeared and also handed over his written submissions along with some previous orders of SEBI taking a lenient view for similar violations in similar circumstances. 4.0 Consideration of issues 4.1 I have carefully examined the facts and circumstances of the case, the inspection report, the Enquiry Report and the submissions of the broker thereto and my observations are as follows: 4.1.1 The broker contended that the show cause notice was issued under SEBI (Procedure for Holding Enquiry by Enquiry Officer and Imposing Penalty) Regulations, 2002 which came into force with effect from September 27, 2002, hence the laws prevailing at the time of initiation of inspection shall apply and the laws which came into existence subsequent to the date of inspection cannot be made applicable. EO found no merit in the same in view of the provisions of Regulation 23 of the said Regulations. I agree with the EO in this regard since Regulation 23(1) clearly states that “notwithstanding amendment of the regulations as specified in regulation 21, anything done or any action taken including any proceeding for inspections or investigation or enquiry commenced or a

Source: SecMarx — sebi:WTM/VKC/MIRSD/06/3/08. 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.