SEBI v. Modex International Securities Limited and others (client funds and securities, 2026)
Judgment entered
Checked against the primary document on October 9, 2026. The library's summary, tags and figures for this record were compared with the regulator's own document by an AI model (Claude) following written instructions, in a single reading of the order; an independent second reading of 60 SEBI records agreed on every field for 56, the four misses being penalty amounts; a later sample of 50 of the SEBI records added on 9 October agreed on every field for 46. No lawyer has reviewed them. A checked record can still contain errors, and checked does not mean endorsed. See how we check records or report a correction.
In August 2026 SEBI found that the stockbroker Modex International Securities Limited misused client funds and securities, falsified its books and paid assured returns to clients, in breach of the PFUTP Regulations. It restrained the firm and director Pavan Kumar Sachdeva until client claims are settled through NSE and fined each Rs 7 lakh.
The record
| Agency | SEBI (India) |
|---|---|
| Date filed | 2026-08-21 |
| Date resolved | 2026-08-21 |
| Court | SEBI Quasi-Judicial Authority |
| Status | judgment |
| Asset class | equities |
| Instruments | client funds and securities held by a stockbroker |
| Venue | NSE, BSE |
| Criminal parallel | No |
| Defendants | Modex International Securities Limited ; Dharmendra Kumar Arora ; Pavan Kumar Sachdeva |
| Techniques |
What was ordered
- Civil penalty
- —
- Disgorgement
- —
- Prejudgment interest
- —
- Total relief
- —
- Alleged gain
- —
- Penalty as published
- 1.4m INR
What is alleged to have happened
This final order of 21 August 2026 was passed by a SEBI quasi-judicial authority in the matter of Modex International Securities Limited, a registered stockbroker, and its whole time directors Dharmendra Kumar Arora and Pavan Kumar Sachdeva. The exchange NSE had found, through supervision data, an inspection and a forensic audit of April 2017 to January 2020, that the broker had falsified its register of securities by passing false transfer entries. SEBI issued an ex-parte interim order on 30 April 2020 and a confirmatory order on 11 September 2020.
The order sets out allegations from a show cause notice of 5 July 2021 and findings on each. The broker was alleged and found to have a shortfall of clients' securities of about Rs 95.29 crore against recoverable balances of Rs 113.03 crore, to have moved about Rs 100 crore of client funds between the cash and futures-and-options settlement accounts and diverted funds to advance payments for flats, to have a shortfall of client funds, and to have misrepresented books and ledgers.
It was also found to have made periodic payments to certain clients despite their losses, which the officer treated as an unregistered portfolio management business. The firm's defences, including that a former director and an associate were responsible and that sums were recoverable, were rejected as unsupported. The order finds the firm in breach of section 12A of the SEBI Act and Regulation 3(d), Regulation 4(1) and sub-clauses (f), (m) and (p) of Regulation 4(2) of the PFUTP Regulations, along with stock-broker, portfolio-manager and circular provisions.
Mr Arora died on 17 April 2021, before the notice, so proceedings against him abated. NSE was made lead exchange to settle client claims from the assets of the firm and Mr Sachdeva, accounts are to be released to NSE for that purpose, and the firm and Mr Sachdeva are barred from the securities market until the claims are settled. Each of the two was fined Rs 5 lakh under section 15HA of the SEBI Act and Rs 1 lakh each under sections 23D and 23H of the securities contracts law, Rs 14 lakh in all. The authority said the primary aim was to remedy investor loss and that the penalties reflect the statutory minimum.
The record does not show how much has been repaid to clients, whether anyone appealed, or any criminal case.
This library applies no technique tag to the matter, because no technique, because the findings are of a broker misusing client money and falsifying records, which fits none of the library's techniques. The tagging is ours, not the regulator's.
For the regulator's own account of the facts, read the primary document linked above. This page deliberately summarises the structured record rather than reproducing the order.
Timeline
- 2026-08-21 SEBI final order
Primary documents
Everything on this page derives from the documents below. Where our summary and the primary document disagree, the primary document is right.