SEBI slaps Rs 12 lakh fine on Finquest Securities
SEBI the market regulator of India charged a fine of Rs 12 lakh on Finquest Securities Pvt Ltd on Tuesday for multiple lapses, including misutilization of client funds and failure to settle accounts of clients within the stipulated time.
An investigation has been done of the broking and depository participant operations of Finquest from February 11 to February 18, 2019. This was for the inspection period from April 1, 2017, to February 18, 2019.
In the investigation, it was found that the broker had misutilized client funds of non-promoter-related clients on October 9 and October 10, 2018, as per order.
“It is established that notice (Finquest Securities) was not settling accounts of its clients within the stipulated time as prescribed by SEBI, in 9 instances for periods over 94 days and in case of 2 active and 43 inactive clients, settled accounts only after observations were highlighted by the inspection team,” the order said.
Apart from this SEBI noted that Finquest funded one client beyond the stipulated period and allowed further exposure to the tune of Rs 3.58 crore out of a total of 25 clients examined, which violated of SEBI norms.
“It has also been established that the notice provided incorrect information to the exchanges on its net worth and risk-based supervision,” the order said.
While imposing fines totaling Rs 12 lakh, SEBI also noted that the notice has made efforts to meet with the compliance gaps post the inspection.
SEBI imposed a fine of Rs 5 lakh on an individual in the matter of Action Financial Services (India) Ltd. The individual — Atul Sharma — was fined for deliberately indulging in the manipulation of the company’s scrip and creating a misleading appearance of trading to induce innocent investors in the securities market.
In a separate order, the regulator slapped a fine of Rs 3 lakh on Sushil Financial Services Pvt Ltd for using funds of credit balance clients for settlement obligations of debit balance clients, among other violations.