SEC charges Indian brokerages, including Edelweiss, Ambit for unauthorised dealings

JM Financial solicited and provided brokerage services to US investors from at least October 2007 until February 2012, the SEC said.

As part of its cross-border activity with US investors, JM Financial bought and sold securities of Indian issuers on Indian stock exchanges on behalf of at least 91 US investors and received transaction-based compensation of about USD 2.3 million.

For its overall services to Indian issuers, JM Financial received approximately USD 24 million in transaction-based compensation based upon a percentage of the value of the offerings, a portion of which was attributable to purchases by US investors, SEC said.

However, JM Financial also undertook corrective action after being contacted by SEC, the regulator said.

In its order against Edelweiss, SEC said that the Indian firm solicited and provided brokerage services to US investors from at least 2007 until July 2011.

As part of its cross-border activity with US investors, Edelweiss bought and sold securities of Indian issuers on Indian stock exchanges on behalf of US investors and received transaction-based compensation of about USD 9.4 million, it said.

Edelweiss also participated as a lead or co-lead manager in public offers of seven Indian companies in which shares were sold and/or marketed to US investors. It also

participated in private placements of securities structured as 'Qualified Institutional Placements' and alternative asset funds that were marketed to the US investors.

After being contacted by the SEC staff, Edelweiss also promptly undertook

... contd.