SEBI finds Gogia Capital violated net worth, client funds rules

This is a final order by SEBI regarding Gogia Capital Services Limited, a registered stock broker, concerning alleged violations of regulations related to net worth maintenance, engaging in non-securities business, and settlement of client funds.

Who it concerns: Gogia Capital Services Limited (Registration No. INZ000202733)

What SEBI found or ordered

• SEBI found violations of the Securities Contracts (Regulation) Rules, 1957, SEBI (Stock Brokers) Regulations, 1992, and various SEBI Circulars.
• Alleged violations include: shortfall in net worth and improper maintenance of books; engaging as a principal/employee in business other than securities involving personal financial liability; and non-settlement of clients' funds and securities.
• The Designated Authority (DA) recommended that the Noticee be prohibited from onboarding new clients for a period of one month.
• The order notes that the Noticee claimed its net worth was negative by Rs. 10,11,70,306/- as on March 31, 2023, due to unadjusted receivables, while the Noticee argued it met the requirement after changing membership type.

Also in the document

• The inspection period covered April 01, 2022, to July 31, 2023.
• The Noticee mentioned a transfer of Rs. 33,81,75,088.25 to Arpna Capital Services Pvt. Ltd. in March 2023, which it claimed was related to proprietary trading losses rather than lending.
• The order text provided is truncated and does not contain the final penalty imposed by SEBI, only the DA's recommendation and the background of the allegations.