Stock broker Angel Broking has settled a case of alleged misutilisation and non-settlement of clients’ fund with regulator Sebi by paying nearly $450k towards settlement charges.
Sebi conducted an inspection of the books of accounts of Angel Broking during September 19-23 and October 19-21 in the year 2016.
During the inspection, Sebi observed that the stock broker “met the pay-in obligation of clients having debit balance from the funds of clients having credit balance”, Sebi said.
Moreover, it was not settling running accounts of the inactive clients periodically, the regulator added.
By doing so, Angel Broking allegedly violated code of conduct for stock brokers. Accordingly, adjudicating proceedings were initiated against Angel Broking and a show cause notice was sent on March 20, 2019.
Following which the broker proposed to settle the proceedings without admitting or denying the findings by proposing to pay Rs 31,87,500 as settlement charges.
The amount was approved by the panel of whole-time members of Sebi, the order noted.
Subsequently, “the instant adjudication proceedings initiated against the applicant (Angel Broking) vide show cause notice dated March 20, 2019 are disposed of,” the Securities and Exchange Board of India (Sebi) said Monday.
Enforcement actions, including restoring or initiating the proceedings, could be initiated if any representation made by them is found to be untrue, the regulator said.