H.G. MARKETS (PRIVATE) LIMITED vs COMMISSIONER-SMD, SECP Ss — 2024 CLD 1381 SECURITIES-AND-EXCHANGE-COMMISSION

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H.G. MARKETS (PRIVATE) LIMITED VS COMMISSIONER-SMD, SECP Ss. 57, Cls. (a) to (f), 123(8) & 123(10)---Provisions relating to standards of conduct, non-compliance of---Whether broker fulfilled its duties diligently towards its customers---Appellant (a futures broker of the Pakistan Mercantile Exchange (PMEX) was penalized by Securities and Exchange Commission of Pakistan ('the Commission'))---Allegation levelled by the complainants was that they had given discretionary authority to the employees of the appellant to trade in their accounts and the employees of the appellant indulged in excessive trading with the sole objective of generating commissions resultantly, they lost all or a significant part of their investments---Record revealed that in case of two complainants who did not give Discretionary Trading Authority (DTA) to the Appellant, the latter kept trading without obtaining the DTA, or to say the least, written instructions thereof, inter alia, resulting in losses suffered by the said complainants, which comprised of approximately two-thirds of the total loss suffered by all the Complainants and commissions of the appellant---Even in the case of the five Complainants who gave the DTA to the appellant, appellant failed to establish as to what mechanism was adopted to obtain their verbal instructions, as it had been alleged by the complainants that despite repeated attempts, they were unable to establish contact with the traders/employees of the appellant and hence, incurred huge losses---Obtaining a DTA placed a higher fiduciary responsibility on a broker and sending emails and text message notifications pertaining to trading activity did not absolve the broker from his duties, particularly where nothing was available on record to show any effort/action by the appellant, despite losses incurred by the complainants---Appellate bench modified the impugned order to the extent that the penalty imposed upon the appellant vide impugned order was reduced to Rs.3,500,000/---Appeal was disposed of accordingly.

H.G. MARKETS (PRIVATE) LIMITED vs COMMISSIONER-SMD, SECP Ss — 2024 CLD 1381 SECURITIES-AND-EXCHANGE-COMMISSION-OF-PAKISTAN

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