The regulator had conducted a multi-theme inspection of Fairwealth between April 2017 and July 2018.
It was found that the noticee (Fairwealth Securities) had misutilised the securities of clients by pledging more value of securities than the obligation of debit balance clients and by pledging the securities of credit balance clients.
Also, by transferring funds on multiple occasions and not keeping any audit trail for movement of such funds, Fairwealth had not done segregation of client’s and own funds, the Sebi order noted.
Besides, the regulatory said the misuse of funds ranges from Rs 7.40 crore to Rs 18.25 crore and the misuse of clients’ securities was of the value of Rs 19.28 crore.
The broker had not settled the funds and securities amounting to Rs 13.89 crore of its inactive clients, it added.
Accordingly, a fine of Rs 30 lakh has been levied on Fairwealth Securities.