SEBI v. Fairwealth Commodity Broking Pvt. Limited (client funds misuse, 2023)
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.
On 19 July 2023 a SEBI whole-time member cancelled the registration of the commodity broker Fairwealth Commodity Broking after an inspection found it had failed to segregate or settle client money and had used credit-balance clients' funds for other purposes.
The record
| Agency | SEBI (India) |
|---|---|
| Date filed | 2023-07-19 |
| Date resolved | 2023-07-19 |
| Court | SEBI whole-time member |
| Status | judgment |
| Asset class | commodity derivatives |
| Instruments | client funds held by a commodity derivatives broker |
| Venue | MCX, NCDEX |
| Criminal parallel | No |
| Bars imposed | commodity derivatives stockbroker registration cancelled |
| Defendants | Fairwealth Commodity Broking Pvt. Limited |
| Techniques |
What was ordered
- Civil penalty
- —
- Disgorgement
- —
- Prejudgment interest
- —
- Total relief
- —
- Alleged gain
- —
What is alleged to have happened
A SEBI whole-time member, Ashwani Bhatia, issued this order on 19 July 2023 under section 12(3) of the SEBI Act and Regulation 27 of the Intermediaries Regulations 2008. The sole noticee is Fairwealth Commodity Broking Pvt. Limited, a commodity derivatives broker and member of the MCX and NCDEX.
The case arose from a SEBI inspection of the firm for April 2017 to December 2018, and a forensic audit report on a sister broker supplied by the BSE. A designated authority issued a show cause notice in September 2021. Because mail and email to the firm bounced, notices of the hearing were published in newspapers, and the firm did not take part.
The findings included failure to keep client funds apart from the firm's own, use of credit-balance clients' funds on some trading days to meet other clients' or the firm's own obligations, failure to settle client accounts even after 180 days, missing enhanced-supervision data, defective client registration, and wrong mobile numbers and email addresses in the client code database. The notice alleged breaches of SEBI circulars, the broker code of conduct and, for the misuse of funds and data, section 12A of the SEBI Act with Regulations 4(1) and 4(2)(f) of the PFUTP Regulations 2003. The whole-time member agreed with the designated authority's conclusion that these were established and described the findings as shocking, showing neglect of fiduciary duty.
The only direction is cancellation of the certificate of registration for the commodity derivatives segment, effective immediately, with copies to the two exchanges. No monetary penalty is stated in the order.
The record does not show the total sum of client money affected, whether clients were repaid, or whether the firm or its directors faced other proceedings or appeals. The conduct is broker misuse of client assets rather than market-price manipulation.
This library does not assign a technique tag to the matter, because no technique in the library fits the conduct. 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
Primary documents
Everything on this page derives from the documents below. Where our summary and the primary document disagree, the primary document is right.