A joint inspection was conducted by Sebi, BSE, NSE and Central Depository Services India Ltd (CSDL) into the broking and depository participant operations of Asit C Mehta Investment Intermediaries from April 2017 to September 2018.
During the inspection period, the regulator observed that the noticee (Asit C Mehta Investment Intermediaries) as a stock broker had misused clients’ fund wherein funds of credit balance clients was used for debit balance clients and for its own purposes.
The amount of misutilisation ranges from Rs 7.3 crore to Rs 28.9 crore, Sebi said in an order.
The watchdog also noted that the broker had not made quarterly settlements of its active clients.
Besides, it was found that the broker was not maintaining reconciliation statement indicating the details of funds transferred between clients and own bank accounts on a daily basis.
Maintenance of reconciliation statement would help stock brokers to control flow of funds in between its own account and client accounts, the order noted.
Accordingly, it slapped a fine of Rs 27 lakh on Asit C Mehta Investment Intermediaries for the violations.