SEBI v. Fairwealth Securities Limited (unauthorised trading and misuse of client assets, 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 26 July 2023 a SEBI whole-time member cancelled the stockbroker registration of Fairwealth Securities after a forensic audit found unauthorised trading, off-market transfers and pledging of client securities, misuse of client funds and a false net-worth certificate.
The record
| Agency | SEBI (India) |
|---|---|
| Date filed | 2023-07-26 |
| Date resolved | 2023-07-26 |
| Court | SEBI whole-time member |
| Status | judgment |
| Asset class | equities |
| Instruments | client securities and client funds held by a stockbroker |
| Venue | NSE, BSE, MSEI |
| Criminal parallel | No |
| Bars imposed | stockbroker registration cancelled |
| Defendants | Fairwealth Securities 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 26 July 2023 under section 12(3) of the SEBI Act and Regulation 27 of the Intermediaries Regulations 2008. The noticee is Fairwealth Securities Limited, a stockbroker in the equity, derivative and currency segments of the NSE, BSE and MSEI and a depository participant of CDSL.
The case began with an NSE report in October 2019. SEBI then passed an ad interim ex parte order against the firm and thirteen other entities, and the BSE commissioned a forensic audit covering 2016-17 to December 2020. The audit reported unauthorised off-market transactions and trading in client accounts, misappropriation and unauthorised pledging of client securities, unavailability of securities, non-settlement of client accounts, use of client funds for the firm's own purposes or for debit-balance clients, an incorrect net-worth certificate and failure to cooperate with the exchanges.
The order records figures such as client credit balances of about Rs 57 crore on the books against which funds were not held, and a net worth reported at Rs 12 crore that was in fact negative by Rs 13 crore. A designated authority conducted an enquiry. The member found the firm in breach of section 12A(a)-(c) of the SEBI Act and Regulations 3 and 4 of the PFUTP Regulations 2003 (several limbs), and of the broker code of conduct, called the findings shocking, and agreed with the recommendation to cancel the registration.
The only direction is cancellation of the certificate of registration, effective immediately, with copies to the exchanges. No monetary penalty is stated in this order.
The record does not show how much clients ultimately lost or recovered, whether the firm responded, or what became of the thirteen related entities and the firm's officers. 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.