Shares of Aditya Birla Money dropped as much as 2 per cent on Friday as the Securities and Exchange Board of India has imposed a fine of Rs 10 lakh on the company for violating the norms of stock brokers.

Following a negative open at Rs 80 against the previous close of Rs Rs 80.35, the scrip touched an intraday high of Rs 80.20 and a low of Rs 78.85. In terms of equity volume, 0.2 shares were exchanged on the BSE.

The company shares ended down by 1.68 per cent at Rs 79.

SEBI had conducted an inspection of books and records of the broker from April 2010 to August 2011 to ascertain whether it had carried unregistered PMS activities, before obtaining registration as PMS in July 2010, through its ‘Option Maxima Strategy’.

“In the current scenario, noticee (Aditya Birla Money) did not have any agreement with its clients to act as their portfolio manager, as it was demonstrated and accepted that noticee was advising its clients, providing incidental advice is allowed in broker regulations...”

"...However, I note that noticee was the one who was directing its clients as well, i.e., it was the one who was taking the trading decision based on its expert team (centrally located); ticket size was almost similar as that prescribed under SEBI Portfolio Manager Regulation,” SEBI Adjudicating Officer Sahil Malik said in an order.

Accordingly, the Securities and Exchange Board of India levied the fine on the stock broker. In a separate order, the markets regulatory has imposed a penalty of Rs 10 lakh on Jangoo Dalal, non-executive director of Smartlink Network System, for violating regulatory norms.

“I find Jangoo guilty as he had traded during trading window closure and not procured pre-clearance of his trade during the trading window closure period,” Malik said.

By indulging in such activity, Dalal has violated the model code of conduct specified in the prohibition of insider trading (PIT) regulations.

(With inputs from PTI)

Related Topics
comment COMMENT NOW