Leading brokerage Emkay Global on Friday settled a Sebi probe into alleged violations of broker regulations by paying about Rs 11 lakh towards settlement charges.
Sebi had launched adjudication proceedings in April 2013 against Emkay Global Financial Services Ltd in a case relating to alleged violation of the Code of Conduct for Stock Brokers and the Sebi regulations for stock brokers and sub brokers. These related to Emkay's dealings in shares of Aarey Drugs and Pharmaceuticals Ltd.
In its show-cause notice, Sebi had alleged that Emkay executed synchronised trades in the shares on behalf of its clients, namely Nita B Bhavsar, Jipal Shah, Dhavalkumar Soni and C Shah Champaklal wherein noticee had acted as both stock broker and counter party stock broker.
"Some of the trades were executed from the same terminal also. Noticee's alleged failure to exercise due skill and care made the noticee liable for a monetary penalty..." Sebi said.
Pending adjudication proceedings, Emkay submitted a consent application in December 2013 to Sebi for settlement of the case. Later, Emkay representatives submitted before Sebi in March 2014 the revised settlement terms with am amount of Rs 11,00,800 towards settlement charges.
The settlement terms were placed before the High Powered Advisory Committee on Consent, which in December last year looked into the matter and recommended the case for settlement.
This was later approved by the panel of Whole Time Members of SEBI in March 2015. "In terms of the proposal of the noticee for the sole purpose of settling the matter on hand and without admission or denial of guilt on the part of the noticee to the findings of fact or conclusions of law, the noticee has remitted a sum of Rs 11,00,800... towards the terms of settlement in the matter," Sebi said in its settlement order on Friday.
Accordingly, Sebi has disposed of the adjudication proceedings initiated against Emkay. Sebi said the settlement order was "without prejudice to the right of Sebi to take enforcement actions including commencing or reopening of the pending proceedings against the notice" if the regulator finds that any representations made by Emkay in the settlement proceedings are untrue.
Besides, Sebi can take fresh action if Emkay is found to have breached any of the clauses or conditions of undertakings, waivers filed during the current settlement proceedings.
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