Sebi fines stock broker SMC Global Securities one lakh rupees over rule violations

Market regulator Sebi has fined SMC Global Securities one lakh rupees for rule violations involving client order records and supervision. The penalty follows an inspection of the stock broker covering the period from January to September 2024. The examination focused on unauthorised trading complaints and client order placement. During the inspection, the watchdog found that SMC Global Securities failed to maintain correct pre-order placement records for certain clients and could not provide needed records for multiple orders. Sebi also discovered gaps in how the firm supervised its authorised person, Amit Lilhare. According to the findings, the broker did not properly monitor bank accounts that received commissions or check payout requests made by clients. The regulator noted that 161 out of 343 active clients mapped to Lilhare showed a pattern of fixed payouts. These involved client investments totaling six crore eleven lakh rupees and payouts exceeding one crore eighty-four lakh rupees during the inspection period. Because of these issues, the broker flouted Stock Brokers Regulations and other market norms.

Context

SMC Global Securities is a registered stock broker and a member of major Indian exchanges including the BSE, NSE, MCX, and NCDEX. Market regulators routinely inspect brokers to make sure they follow compliance rules and protect investor interests.