India's IIFL Securities tanks after 2 year ban on new stockbroking clients (updated)

IIFL Capital Services

20/06/2023 05:10

(Adds background in paragraph 2 and 3, and statement from IIFL
in paragraph 4)
       BENGALURU, June 20 (Reuters) - Shares of India's IIFL
Securities  IIFS.NS  fell as much as 19.2% on Tuesday, a day
after the country's markets regulator barred its stockbroking
unit from taking on any new clients for two years, alleging
misuse of client funds in 2013-14.
    The Securities and Exchange Board of India (SEBI) on Monday
said IIFL Securities was involved in the mixing of clients'
funds with its own funds,  utilizing credit balances in one
client's accounts for the needs of another. 
    The alleged violations took place between April 2011 and
January 2017, SEBI found, while inspecting the company's
operations and accounts. 
    The Mumbai-based company in a statement said that SEBI
applied its rules retrospectively and it is in the process of
appealing against the order before the Securities Appellate
Tribunal. 
    In its order, SEBI noted that the company has taken
corrective actions since the alleged violations came to light
but added that some regulatory action is necessary due to the
"gravity of the violations committed." 
    IIFL Securities shares saw their biggest intraday percentage
loss since December 2021, trading down 15.9% as of 9:27 a.m.
IST.

 (Reporting by Biplob Kumar Das in Bengaluru; Editing by
Nivedita Bhattacharjee)
 ((Biplobkumar.das@thomsonreuters.com; 9101861583;))