SEBI disposes of proceedings against Indiabulls securities

SEBI had alleged that Indiabulls Securities had modified the client codes without informing the exchange and issued contract notes to transferee clients

Mumbai: Market regulator Securities and Exchange Board of India (SEBI) has disposed of inquiry proceedings against Indiabulls Securities after the entity made a payment of Rs5.10 lakh to settle charges alleging violations of certain provisions of broker norms, reports PTI.


“... it is hereby ordered that this consent order disposes of the aforesaid enquiry proceedings initiated against Indiabulls Securities Ltd,” SEBI said in an order dated 2 January 2013.


The case relates to SEBI probe into trading by Indiabulls Securities in 2008-09.


The regulator had alleged that Indiabulls Securities had modified the client codes without informing the exchange and issued contract notes to transferee clients.


The broker had also allegedly indulged in wrong margin reporting for both transferor and transferee. It failed to provide order book for the Futures and Options segment.


Based on its investigations, the regulator had initiated enquiry proceeding against Indiabulls Securities.


While, the proceedings were pending, the stock broker proposed a settlement under SEBI's consent order mechanism in April 2007.


In August 2012, Indiabulls Securities revised its consent terms and offered to pay Rs5.10 lakh to settle the case.


Thereafter, SEBI’s High Powered Advisory Committee on Consent (HPAC), after deliberations, recommended the case for settlement on the payment of the amount. This was also approved by SEBI, following which Indiabulls remitted an amount of Rs5.10 lakh on 26 November 2012.


SEBI noted that enforcement actions, including commencing or reopening of the proceedings, could be initiated if any representation made by the stock broker is found to be untrue.


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SEBI alters consent mechanism norms

SEBI chairman UK Sinha was answering media queries on what action will be taken against Reliance and Sahara Groups for their alleged market misconduct

Mumbai: Market regulator SEBI said it has framed a new set of guidelines for consent order mechanism and warned that any corporate house, however big it may be, caught for serious misconducts will be severely dealt with as the market is not a "casino".


"We have come out with a new set of guidelines for the consent mechanism and if any corporates or individuals, however powerful they may be, are found going against that policy, stern action will be taken against them," Securities and Exchange Board of India (SEBI) Chairman U K Sinha told reporters.


He was answering media queries on what action will be taken against Reliance and Sahara Groups for their alleged market misconduct.


However, Sinha did not name any of these companies, nor did he reveal the changes in the new consent mechanism, but said if any corporate or individual flouts the regulatory norms stern action will be taken against them as per the law.


Consent mechanism refers to settlement of a case dealing with alleged flouting of securities laws without the individual or company involved admitting or denying guilt. The alleged party gets absolved of the charges by paying a mutually agreed penalty to the SEBI.


"We are taking all possible measures to ensure that nobody is able to avoid the rules of the game, especially on a continuous basis, to harm the interests of the individual and institutional investors," he warned.


"The SEBI is continuously taking measures to improve retail investors' confidence in the equity markets ... the market is not a casino where one can do anything and get away with it," Sinha said.



Vinay Joshi

5 years ago

Ms.Sucheta / MDT,

Good that you've put it up.

U.K Sinha, in his ASSOCHAM speech was vociferous of disciplinary measures against listed co's. [Later on the kerb interview he has stated as reported by you.]

Well i'm referring to insider trading charges against RIL. [RIL-CAG-JPC oil exploration diff issue. It's a scam.]

RIL's consent plea rejected, moved for 11B proceedings.
Is it a ploy? SEBI can absolve RIL of all it's wrongdoings under 11B!?
Why the matter is languishing for last five years?
[since 2007.]Still the matter can be moved back to 'consent mechanism!]

RIL has appealed in SAT challenging SEBI's new consent order norms. Again there's lacuna in new consent order norms - advisory committee or panel members can settle such defaults thro' consent if deemed fit & necessary!

SAT hearing scheduled on 11th may not take place as two [of three] members are retiring.If RIL prefers appeal in Bombay HC for interim relief, the matter will again be delayed, dragged.

Will SEBI [rather will it] invoke the provisions of sec 15G & 11B, penalties & debarring RIL from participating in capital market? Has SEBI the gumption or for that matter Mr.U.K Sinha?
Or even the FinMin or the Cabinet?

State forward a question Mr.U.K Sinha should answer!?

It will end up with 15G not 11B debarring!?
This will & can enable other aggrieved entities to file a PIL.

No one can touch the high & mighty RIL! Instead of 3x penalty of 1.5K+Cr, 500+Cr consent paid [RIL willing from day 1], another 500Cr official political donations thereby saving 500+ & no debarring or blemished.

Can any other entity have such privileges? We will await the outcome, if any!

Is RIL not in contravention of listing norms? Does the listing norms allow 'insider trading'?

Mr.U.K Sinha & SEBi should state specifically that RIL is not in contravention of listing norms - which amounts to that listed co's can indulge in 'insider trading' as per BSE/NSE norms & no 11B [SEBI] debarment can take place. Were BSE/NSE sleeping then?

Bye, t/c all,



Vinay Joshi

In Reply to Vinay Joshi 5 years ago

Ms.Sucheta /MDT,

Further to my above post, Sahara is no matter for consideration. Mr.U.K Sinha knows it very well.

SC has rejected Sahara's review petition & as per SEBI ruling asked them to deposit 24KCR by Feb. [intermittent installments ends.] 5.2KCR+10KCR BG quashed by the apex court, upholding SEBI's final order.

The above is self explanatory.

Bye, t/c all,


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