2023 (1) TMI 1477

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....) of the Code of Conduct specified in Schedule II read with Regulation 9(f) of the Securities and Exchange Board of India (Stock Brokers) Regulations, 1992 (hereinafter referred to as 'Stock Brokers Regulations'), the present appeal is preferred. 2. The appellant is a stock broker. Securities and Exchange Board of India (hereinafter referred to as 'SEBI') conducted multi-theme inspection of the records of the appellant in the year 2015 for the period between 1st April, 2012 to 30th September, 2015. During inspection it found various irregularities. It was found that the appellant failed to settle the funds and securities of its clients, misused the client funds and, therefore the penalty was imposed. 3. We have heard Mr. A....

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....no. 521 of 2019 decided on 21st October, 2021. In paragraph 10, this Tribunal held as under: "10. Upon hearing both sides and upon perusing the relevant circulars, in our view, the order cannot be faulted with. The earlier circular had clearly stated that the funds of the client cannot be applied for any other purposes. The appellant's case was that the funds were applied by it for the dues for their associates, group company, etc. Now, during the arguments only, the issue of nonexistence of formula in the previous circular is brought up. In fact, the said formulization is nothing but the crystallization of the earlier circular." 6. Thus, the subsequent circular was merely formulization of the earlier circular to prevent the misuse o....