SEBI probes Prabhudas Lilladher over client fund misuse and excess brokerage

This is an Enquiry Order by SEBI regarding Prabhudas Lilladher Private Limited, a registered stock broker, concerning alleged violations of regulations related to client fund management, settlement, and reporting observed during a joint inspection in 2022.

Who it concerns: Prabhudas Lilladher Private Limited (SEBI Registration No. INZ000196637)

What SEBI found or ordered

• SEBI observed prima facie violations including misuse of client funds, non-settlement of client accounts, incorrect reporting of margins and balances, and collection of excess brokerage.
• A Designated Authority (DA) recommended that the Noticee be prohibited from taking up any new assignment or contract for a period of 15 days.
• The Noticee submitted replies arguing that lapses were technical, procedural, or due to software errors, and that no investor harm occurred.
• The document provided is truncated before the final findings and final order of SEBI are stated.

Also in the document

• The inspection was a comprehensive joint effort involving SEBI, NSE, BSE, and MCX.
• The Noticee mentioned that a separate adjudication proceeding on the same facts had already concluded with a penalty of ₹11,00,000.
• The DA's recommendation of a 15-day ban on new assignments was based on Regulation 26(1)(iv) of the SEBI (Intermediaries) Regulations, 2008.