Sebi has slapped the fine on Indiabulls Securities for not taking adequate steps to redress the complaints within 30 days of the receipt, executing trades in clients account without their instruction and squaring off of client's positions even after sufficient ledger balance/margins, among other things.
"...it is not in dispute that there were 82 out of 372 complaints where the noticee has taken more than the stipulated 30 days to reply/redress the complainant," Sebi said in an order dated December 28.
Sebi found that the majority of the 82 complaints were those concerning square up position and trade disputes "which have financial repercussions on the investors where time value and opportunity costs are essential ingredients".
On the charge regarding squaring off of trades, Sebi said that "any recourse to sell off securities without making margin call on the client would play foul of the regulatory provisions...conclude that the broker has faulted in this respect".
Other violations by the stock broker included accepting orders from client's financing entity without the instructions of the client and for providing incomplete data to Sebi's inspection team.
Sebi had conducted an inspection of the books of accounts, documents and various other records maintained and furnished by Indiabulls Securities at the entity's branch offices in Mumbai, Kolkata, Delhi and Chennai between September, 2009 and January, 2010.