{"id":245651,"date":"2021-03-16T12:10:35","date_gmt":"2021-03-16T06:40:35","guid":{"rendered":"https:\/\/www.scconline.com\/blog\/?p=245651"},"modified":"2021-03-26T12:00:43","modified_gmt":"2021-03-26T06:30:43","slug":"stock-broker","status":"publish","type":"post","link":"https:\/\/www.scconline.com\/blog\/post\/2021\/03\/16\/stock-broker\/","title":{"rendered":"SEBI | On account of active and willful issuance of fake and bogus contract notes, stockbroker registration cancelled"},"content":{"rendered":"

Securities and Exchange Board of India (SEBI):<\/strong> G. Mahalingam (Whole Time Member), while exercising powers conferred under Section 12(3)\u00a0 read with Section 19 of the SEBI Act and Regulation 27(5) of the Intermediaries Regulations, cancelled the certificate of registration of the Alliance Intermediaries and Network Private Limited (Noticee), on account of activity and willful issuance of fake and bogus contract notes against receipt of cash to show fictitious transactions as genuine ones and enable its clients to book fictitious speculative gains and short\/long term gains\/losses for tax purposes.<\/p>\n

In the pertinent case, it was found by the Noticee was registered with the Securities and\u00a0 Exchange\u00a0 Board of\u00a0 India as a\u00a0 member of\u00a0 Inter-Connected\u00a0 Stock Exchange of India Limited. During 2004\u00a0 to\u00a0 2007,\u00a0 contract notes were issued by intermediaries (i.e. person of any business in the market) to clients (individual entities) on behalf of the Noticee on accepting cash from intermediaries and giving cheques by the Noticee to intermediaries.\u00a0 The Noticee was earning a commission of 0.15% for the deposit of cash in its various companies. Counsel appearing before the Investigating authority also presented the modus operandi of for issuing fake contract notes for speculative profits\/losses on behalf of clients.<\/p>\n

Therefore, recorded that as per the findings of the Income\u00a0 Tax\u00a0 Department, the Noticee was engaged in making accommodation entries for clients to facilitate speculative short term \/ long term profits\/losses. And further noted that the activities of the Noticee, were inherently fraudulent and were aimed at aiding and abetting tax frauds. And held that the Noticee was no longer a \u2018fit and proper person and thereby in respect of Alliance Intermediaries and Network Private Limited has violated\u00a0 Regulation\u00a0 5(e)\u00a0 read with\u00a0 Regulation\u00a0 5A\u00a0 of the\u00a0 Stock\u00a0 Brokers\u00a0 Regulations read with provisions of\u00a0 Schedule II of the Intermediaries Regulations.[Alliance Intermediaries and Network Private Limited, In re, 2021 SCC OnLine SEBI 24<\/b><\/a>,\u00a0 decided on 09-03-2021]<\/p>\n","protected":false},"excerpt":{"rendered":"

Securities and Exchange Board of India (SEBI): G. Mahalingam (Whole Time Member), while exercising powers conferred under Section 12(3)\u00a0 read with Section <\/p>\n","protected":false},"author":67011,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[3,11],"tags":[45467,21464,29785,2563,39644],"class_list":["post-245651","post","type-post","status-publish","format-standard","hentry","category-casebriefs","category-tribunals_commissions_regulatorybodies","tag-contract-notes","tag-income-tax-department","tag-law","tag-SEBI","tag-stock-broker"],"yoast_head":"\nSEBI | On account of active and willful issuance of fake and bogus contract notes, stockbroker registration cancelled | SCC Times<\/title>\n<meta name=\"description\" content=\"Stock broker\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link 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