The Securities and Exchange Board of India (SEBI) has imposed a fine of Rs 7 lakh for violating the share broker and depository partner rules on Motilal Oswal Financial Services Limited. According to SEBI’s order, the company has been directed to pay the fine within 45 days.
Action taken after investigation
SEBI inspected Motilal Oswal Financial Services Limited from April 2021 to June 2022. Investigation found that the company did not resolve 26 complaints over a period of 30 days. In addition, in June 2022, 39 customers traded, which the broker considered inactive and kept their funds separated.
Strict steps in front running cases
Recently, SEBI banned eight units from the securities market and seized an amount of Rs 4.82 crore earned by these units allegedly earned from front-ringing activities. Front-hanging is an illegal process, in which a person transactions based on non-public information found from a broker or analyst.
Duration and conclusion of investigation
SEBI examined the deals of Gagandeep Consultancy Private Limited to belong to the alleged front-ringing, which was done from September 2018 to September 2023. SEBI said that Ashish Kirti Kothari and his family members are accused of indulging in the front-ringing deals of the big customer. Due to such deals, these units have violated several provisions of the SEBI Act, so they have been prevented from the purchase, sale or transaction of securities until further orders.
