In a statement, US SEC said that it charged the brokerages for providing brokerage services to institutional investors in the US without being registered with the SEC as required under the federal securities laws. Together, the four firms have agreed to pay more than $1.8 million combined to settle the SECs charges.
According to the regulator, these entities engaged with US investors despite being unregistered broker-dealers, in ways such as sponsored conferences in the US, among others.
In their respective settlements, the firms agreed to be censured while neither admitting nor denying the SECs 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 and Motilal agreed to pay $821,594, the statement said.
According to the SECs orders, these firms, despite being unregistered broker-dealers, engaged with US investors by sponsoring conferences in the US, had employees travel regularly to the US to meet with investors, traded securities of India-based issuers on behalf of US investors and participated in securities offerings from India-based issuers to US investors.
The broker-dealer registration provisions are critical safeguards for the integrity of our securities markets, said Scott W Friestad, associate director of the SECs Division of Enforcement. These four firms and all other foreign broker-dealers must educate themselves on the US laws and regulations when they provide services to US investors, he added.