US Securities and Exchange Commission (SEC) has charged four financial services firms based in India for offering brokerage services to institutional investors in the country without registering with the SEC, as per the federal securities laws.
In order to settle the case, the four firms, which include Ambit Capital Private Limited, Edelweiss Financial Services Limited, JM Financial Institutional Securities Private, and Motilal Oswal Securities, have agreed to collectively pay over $1.8m.
Ambit will pay disgorgement and prejudgment interest totaling $30,910, while Edelweiss share will be $568,347.
JM Financial has agreed to pay $443,545, while Motilal will reimburse $821,594.
Commenting on the case, SEC Enforcement Division associate director Scott Friestad said the broker-dealer registration provisions serve as safeguards for the integrity of its securities markets.
"These four firms and all other foreign broker-dealers must educate themselves on the U.S. laws and regulations when they provide services to U.S. investors," Friestad added.
SEC claimed that the firms were engaged with US investors through sponsoring of conferences in the country, sending their employees to meet investors in the country, traded securities of India based issuers on behalf of US investors.
The accused also participated in securities offerings from India-based issuers to US investors, according to the US market watchdog.