IIFL Securities Shares: Markets regulator SEBI has banned IIFL Securities from taking new stockbroker clients for two years. In 2013–14, the company was banned from accepting new clients for two years due to misappropriation of client funds. Sebi on Monday said that IIFL Securities had pooled client’s funds with its own funds which was unwarranted. Further, the company violated norms by diverting the credit balance of one client to another client.
Further, IIFL Securities had wrongly flagged the bank account of the client due to which penalty has been imposed on it. The regulator alleged that IIFL did not implement the rules framed by SEBI in 1993. Shares of IIFL Securities fell 19 per cent as the market opened this morning. After that the stock fell 13 per cent to 62 at 10 am. Looking at the year-to-date returns of IIFL Securities, it has declined 4 per cent in the last six months while the stock has declined 8 per cent.
IIFL Securities was thoroughly investigated over a period of six years. The company has since been found guilty and banned from taking on new customers. IIFL’s fifty-two week high of Rs. 79.40 while the 52-week low was Rs. is 48.20. IIFL Securities share has gained 7.80 per cent in the last one month.
What was revealed in SEBI’s investigation?
SEBI said that the investigation against IIFL Securities was carried out from April 2011 to June 2014. Violation of rules was found in this. The period from FY 2015 to FY 2016-17 was also examined in March 2017. Yet the company broke the rules and worked. IIFL was continuously operating in violation of the rules.
Existing customers will not be affected
IIFL Securities has said that the Sebi order will not affect the business of its existing clients. The company is considering an appeal against this order.