Markets regulator Sebi today imposed a fine of Rs 2 lakh on Geojit Financial Services for violating stock brokers' norm.
It was alleged that Geojit had delayed in filing statement transaction report (STR) with government's Financial Intelligence Unit (FIU) of its clients. Besides, Geojit allegedly failed to exercise proper due-diligence while dealing with client.
The regulator carried out investigation of trades of Imtiyazhusain Saiyedmohamed Saiyed and his wife Riyazunnisa Imtiyazhusain Saiyed, clients of Geojit for the period April 2007 to June 2011.
According to Sebi, the stock broker, on the one hand said that Imtiyazhusain Saiyedmohamed Saiyed was within the highest available slab of net worth and transactions were consequently not suspicious, however, on the other hand it has submitted that the client was requested to update the KYC based on alerts generated.
The regulator further said the move by the stock broker appears to be an afterthought.
"It can be observed that the noticee should have taken efforts for updation of KYC on immediate basis and subsequent reporting to FIU," it said.
Accordingly, Sebi said "Geojit, being intermediary, has failed to comply with the code of conduct of the stock broker by not exercising high standards of integrity and due skill care and diligence in his conduct of business and thus violated ....stock broker regulations" and imposed a penalty of Rs 2 lakh on the broker.
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