The Securities and Exchange Board of India (Sebi) had carried out an inspection of the broking operations of Ganganagar Commodity for the period from April 2017 to October 2018.
During the inspection, it was found that Ganganagar Commodity misutilised funds of credit balance clients for margin obligations of debit balance clients and proprietary trading.
Besides, it had not settled accounts of 73 clients within the prescribed time frame, Sebi said in an order.
“…though the noticee (Ganganagar Commodity) has attempted to be compliant to various norms, there have been gaps in the compliance levels, and the noticee has made efforts to meet with the compliance gaps post the inspection,” Sebi said while imposing the fine.
Through a separate order, the regulator levied a fine of Rs 7 lakh on Sanchay Fincom Ltd for non-segregation of clients’ fund as well as non-settlement of running accounts of few clients.
In addition, Sanchay Fincom had funded seven clients beyond the stipulated period.
By doing so, it violated the provision of Securities Contract Regulation (Act), the regulator said.
The regulator found that Gupta, who was a Senior Vice President of NIIT Technologies, failed to obtain requisite pre-clearance for trading 1,743 shares of the company.
Besides, he entered into an opposite transaction in the shares of the company within the restricted period of six months, thereby violating the model code of conduct for Prevention of Insider Trading.
It was alleged that promoters and PACs (persons acting in concert), including Kothari, had not made any public announcement for acquiring over 5 per cent of RIL shares, thereby, contravening the provisions of SAST (Substantial Acquisition of Shares and Takeover) norms.