SAT to hear IIFL Securities case on August 23

The Securities Appellate Tribunal (SAT) will make the final hearing in the IIFL Securities’ plea against the SEBI’s order banning it from enrolling new clients on August 23.

The Appellate Tribunal gave three-week time to SEBI for its response and thereafter three weeks for filing the rejoinder as it stayed SEBI’s two-year ban order till then.

SEBI had found IIFL Securities mixing clients’ funds with proprietary funds by routing transactions through common control accounts and were using these funds for settlement obligation of clients and proprietary trades.

In 2022, SEBI had twice levied a fine of ₹1 crore each and this was stayed by SAT by interim orders. These appeals are pending consideration before the Tribunal.

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Further, supplementary inspection was carried out up to January 31, 2017, pursuant to which the present proceedings were initiated, and the impugned order was passed.

SAT, in its latest order, said the impugned order of the whole-time member of SEBI records that the instant proceedings arose from the same facts and allegations and further went on to hold that it was permissible under SEBI Act to issue separate proceedings. Prima facie, this aspect is required to be considered, SAT said.

Since interim orders were passed in the earlier appeals which are pending, SAT directed that the effect and operation of the impugned order shall remain stayed during the pendency of the appeal, it said.