Bezel Stock Brokers Pvt. Ltd. vs Sebi

Date of Decision: 07.02.2020

Appeal No. 479 of 2019

Bezel Stock Brokers Pvt. Ltd. D-6/16, Vasant Vihar, New Delhi- 110 057 ...Appellant

Versus

Securities and Exchange Board of India, SEBI Bhavan, Plot No. C-4A, G-Block, Bandra-Kurla Complex, Bandra (East), Mumbai - 400 051 ...Respondent

Mr. Prakash Shah, Advocate i/b Prakash Shah & Associates Advocate for the Appellant.

Mr. Ushajee Peri, Advocate for the Respondent.

CORAM: Justice Tarun Agarwala, Presiding Officer Dr. C.K.G. Nair, Member Justice M. T. Joshi, Judicial Member

Per: Justice Tarun Agarwala (Oral)

1.

The present appeal has been filed against the order of the

Adjudicating Officer ("AO" for convenience) of the Securities

and Exchange Board of India ("SEBI" for convenience) dated

April 25, 2019 imposing a penalty of ` 5 lakhs. 2

2. The facts leading to the filing of the appeal is pursuant to

an inspection a show cause notice was issued to show cause as

to why penalty should not be imposed for violating the

provisions of Circular Dated December 03, 2019 issued by

SEBI and for violating of the Code of Conduct for Sub-brokers

as specified in the Brokers Regulations.

3. The AO after considering the reply of the respondent and

after giving an opportunity of hearing found that the non-

compliance continues even after the inspection and

consequently imposed a penalty of ` 5 lakhs.

4. Having heard the learned counsel for the appellant, we

find that the settlement of the funds/ securities of the client were

required to be made within 24 hours of the payout which has not

happened and for which there is no valid explanation. Further

credit balances of more than ` 10,000/- remained outstanding

for more than 90 days which was also in violation of the

Circular and the Brokers Regulations. We find that by not

settling the account of clients, the appellant was not only using

the idle clients fund but also exposing the accounts of the clients

to misuse. We also find that the inspection made by SEBI was

for the year 2015-2016, 2016-2017. Inspite of knowing the 3

irregularities committed by the appellant the same irregularities

continued which was found by the National Stock Exchange of

India Limited (NSE) when they made the inspection for the

period January 2017 to January 2018.

5. In view of the aforesaid, we do not find any manifest error

in the order of the AO. The Appeal fails and is dismissed.

Sd/-

Justice Tarun Agarwala Presiding Officer

Sd/-

Dr. C.K.G. Nair Member

Sd/-

Justice M. T. Joshi Judicial Member 07.02.2020 Prepared & Compared By: PK