By Malvika Gurung
Investing.com -- Shares of the leading online trading platform IIFL Securities (NS:IIFS) zoomed 9.2% on Tuesday and hit an intraday high of Rs 65.9 apiece in the session after the statutory body Securities Appellate Tribunal (SAT) put a stay on an order passed by the Securities and Exchange Board of India (SEBI) last week.
On June 20, 2023, the markets regulator SEBI passed an order against IIFL Securities, prohibiting the stockbroker from onboarding new clients for two years in respect of its business as a stockbroker, after conducting multiple detailed inspections for different periods from April 2011 to January 2017.
In response to SEBI’s order, IIFL Securities challenged the market regulator’s order before the Securities Appellate Tribunal, and the agency has stayed SEBI’s order.
SEBI conducted a thematic inspection of IIFL’s account books from Jan 30 to Feb 3, 2014, inspecting the company’s records and processes for the period of Apr 1, 2011, to Dec 31, 2013, for examining whether the stockbroker was working in compliance with its provisions.
The regulator found out that IIFL failed to segregate its own funds from clients’ funds, misused credit balances in clients’ funds for the benefit of clients having debit balances, and conducted inappropriate designation of the client bank accounts.
Based on the outcome, SEBI conducted six comprehensive inspections of IIFL’s account books simultaneously at the company’s four different offices from August 7 to September 19, 2014.
The small-cap stock has risen for the third straight session on Tuesday and has surged almost 12% in the period.