• Created structured product involving contract for buying and selling of commodities on NSEL platform
• Overlooked the exchange advice to inform risks involved in buying and selling of commodities to the clients
• Aggressive marketing and mis-selling in violation of Exchange's circulars
• Instances of funding clients
• As it was a business involving buying and selling of commodities principals of business income and
offsetting expenses were applied
• Have strong legal and compliance departments that made them aware of the nature of buying and
selling and risks involved
• Active as C&F agents for the Trading clients, they visited warehouses numerous times (nearly 50 times during a 36 month period) and yet not raised red flags any time
• Audit firms of broking firms showed inventories held in trading as annexures in the balance sheets of the respective firms.
• Instances of executing certain orders without client consent (approximately 3,00,000 client code
modifications)
• Did not once raise or bring to the notice of NSEL Board any irregularity
• Majority of the big brokers were C&F agents and verification of stocks on behalf of their clients was their responsibility
• Overlooked the exchange advice to inform risks involved in buying and selling of commodities to the clients
• Aggressive marketing and mis-selling in violation of Exchange's circulars
• Instances of funding clients
• As it was a business involving buying and selling of commodities principals of business income and
offsetting expenses were applied
• Have strong legal and compliance departments that made them aware of the nature of buying and
selling and risks involved
• Active as C&F agents for the Trading clients, they visited warehouses numerous times (nearly 50 times during a 36 month period) and yet not raised red flags any time
• Audit firms of broking firms showed inventories held in trading as annexures in the balance sheets of the respective firms.
• Instances of executing certain orders without client consent (approximately 3,00,000 client code
modifications)
• Did not once raise or bring to the notice of NSEL Board any irregularity
• Majority of the big brokers were C&F agents and verification of stocks on behalf of their clients was their responsibility
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