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2019 (11) TMI 1559 - AT - SEBIUnexplained use of funds raised by pledging client securities with NBFCs and Banks - monetary penalty of ₹ 15 lakhs and suspension of trading membership of the appellant from all segments of NSE for 5 days - HELD THAT:- There is sufficient evidence against the appellant to prove that certain violations have been committed by it. The magnitude of money involved is also large in terms of ₹ 19 crores worth of client securities being pledged, acceptance of deposits to the tune of ₹ 21.56 crores and non-settlement of funds belonging to 601 clients etc. However, since the appellant has complied with some of the directions issued by the DAC such as submission of CA Certificate, fulfillment of the networth criteria, we are of the considered view that the penalty imposed on the appellant is disproportionate in the given facts and circumstances. The violations are not light enough to let off the appellants scot-free as contended by them. In the result, while upholding the monetary penalty of ₹ 15 lakh imposed on the appellant we modify the direction relating to suspension of the appellant from all segments of the exchange NSE for 5 days to that of a direction not to enroll or register any fresh clients for a period of one month. This period of one month shall commence from the seventh day of the date of this order.
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