Motilal Oswal let off with a warning

Our Bureau Mumbai | Updated on January 22, 2018 Published on December 07, 2015

Cites earlier fine of ₹75,000 & corrective measures taken by the brokerage as reasons for leniency

Motilal Oswal Securities was let off with a warning for having executed trades in the securities market on behalf of clients who had been barred by SEBI from buying /selling/dealing in the securities market.

SEBI found that Motilal Oswal had executed trades on behalf of its debarred clients — Shailesh Jayantilal Shah, Rajesh Jayantilal Shah and Ritaben Rohitkumar Shah.

SEBI observed that it had passed an interim order against the three entities on April 23, 2009, while Motilal Oswal had executed trades in the F&O segment on April 24, 27, 28 and 29, 2009, besides the cash segment on May 7, 2009.

SEBI said, “It is pertinent to note that in the instant case, no prior permission was sought from SEBI for squaring off the open positions of its clients. Hence, the present case materially differs from the case cited by the Noticee. It is clear that the Noticee failed to exercise due skill, care and diligence with respect to the transactions in the present case.” The brokerage was found to have violated broker regulations and code of conduct.

SEBI noted that a stock broking firm having a diversified client base and a group net worth of ₹558 crore (as on March 31, 2012), ought to have put in place adequate systems to avoid such mistakes.

SEBI however, observed that the BSE had already imposed a monetary penalty of ₹75,000 for the same lapses and it had initiated corrective steps subsequent to the episode.

Published on December 07, 2015
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