Securities Law Prof Blog

Editor: Eric C. Chaffee
Univ. of Toledo College of Law

Tuesday, November 27, 2012

Four India-Based Firms Settle SEC Charges They Were Unregistered Broker-Dealers

The SEC settled charges with four financial services firms based in India that they provided brokerage services to institutional investors in the United States without being registered with the SEC as required under the federal securities laws. The four firms – Ambit Capital Private Limited, Edelweiss Financial Services Limited, JM Financial Institutional Securities Private Limited, and Motilal Oswal Securities Limited – agreed to pay more than $1.8 million combined to settle the SEC’s charges.

According to the SEC’s orders against the firms, they engaged with U.S. investors in some of the following ways despite being unregistered broker-dealers:

Sponsored conferences in the U.S.
Had employees travel regularly to the U.S. to meet with investors.
Traded securities of India-based issuers on behalf of U.S. investors
Participated in securities offerings from India-based issuers to U.S. investors.

In their respective settlements, the firms agreed to be censured while neither admitting nor denying the SEC’s charges. Ambit agreed to pay disgorgement and prejudgment interest totaling $30,910. Edelweiss agreed to pay $568,347. JM Financial agreed to pay $443,545. Motilal agreed to pay $821,594.

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