Markets regulator SEBI on Thursday imposed a fine of Rs 2 lakh on Motilal Oswal Securities in a case related to alleged unauthorised trading through use of forged Power of Attorney (PoA).
A complaint was filed by one C R Mohan Raj against Motilal Oswal alleging that though he had given consent to trade only in the cash segment, the latter had traded in derivatives segment without his knowledge.
"I find that the investigation did not bring out the disproportionate gain or unfair advantages to the noticee (Motilal Oswal) and loss caused to investors due to non- maintenance of Power of Attorney. The default cannot be said to be repetitive in nature," SEBI's Adjudicating Officer Sahil Malik said in an order.
The regulator noted that Motilal Oswal failed to produce before it the original PoA signed by the client.
The stock broker in a letter dated November 10, 2017 stated that the original PoA was asked by the consumer court during a hearing which was submitted to it, as per the order.
However, during the transit when the documents were being returned to the head office from the branch office in Bengaluru, they were lost and could not be found, the 18-page order said.
"This shows that the noticee (Motilal Oswal) did not take proper care in securing the important document which was misplaced and could not be traced.
"It may be also be noted that the main issue in the matter was regarding the genuineness of the PoA. The noticee should have been more cautious in handling the PoA when there were ongoing proceedings in relation to the same," SEBI said.
Finding that it has violated norms, the watchdog imposed a penalty of Rs 2 lakh on Motilal Oswal.
According to the regulator, in the present case, the individual has sought redressal of grievances before multiple fora, all of which have reached its logical end and the issue is redressed in all such proceedings.
A complaint was lodged through Scores in July 2011 and it was dealt with by the regulator which had asked him to approach arbitration, and it was closed in April 2012. However, he did not not opt for arbitration, the order said.
"Pursuant to the order of the High Court of Karnataka dated November 22, 2013, the current adjudication proceedings was initiated," it added.
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