Sebi slaps Rs 8 lakh fine on broker Finquest in BoR case

Market regulator Sebi on Thursday imposed a penalty of Rs 800000 on Finquest Securities for violating broker norms in a matter related to dealings in shares of erstwhile Bank of Rajasthan (BoR).Securities and Exchange Board of India (Sebi) has said that Finquest Securities traded for some clients who were related to the promoters of BoR and received third party payments which are made for the trades from entities other than their clients.The matter relates to Sebi's probe into the affairs of BoR for a period between June 2007 and December 2009. BoR has been acquired by ICICI Bank Investigations revealed that the shareholding of the promoters of BoR with the Persons Acting in Concert (PACs) had increased from 46.80% in June 2007 to 63.15% in December 2009.Promoters along with their PACs increased their stake by way of acquiring shares on the market and that certain brokers were involved in this regard.The regulator said it is imposing a "penalty of Rs 800000 ...against the noticee (Finquest), which will be commensurate with the violations committed by it".Sebi observed that "a plain scrutiny of bank account statements should have alerted the noticee that payments were coming in from entities other than its clients. Thereafter, the noticee should have taken expedient steps."Neither is it the case of the noticee, nor is there is anything on record to suggest that such steps were indeed taken".Sebi, further said that as a registered broker, Finquest was required to adhere to the code of conduct prescribed for stock brokers."The conduct of the broker in this case was devoid of due skill, care and diligence, especially since he failed to take any measures to rectify the error, even post facto," Sebi noted.