[ by Melanie Gretchen ]

For the SEC, it's not enough to be based off shore.  If your business operates in the U.S., it is subject to U.S. rules.  So learned 4 India-based brokerage firms charged with violating U.S. registration requirements.

SEC Findings and Allegations. The firms (i) Ambit Capital Private Limited, (ii) Edelweiss Financial Services Limited, (iii) JM Financial Institutional Securities Private Limited, and (iv) Motilal Oswal Securities Limited were not registered with  the SEC as required under the federal securities laws.

"The broker-dealer registration provisions are critical safeguards for the integrity of our 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." -- Scott W. Friestad, Associate Director of the SEC’s Division of Enforcement.

What's crucial to the case is the firm's involvement with U.S. investors.  According to the SEC’s orders against the firms, they:

• sponsored conferences in the U.S.
• had employees travel regularly to the U.S. to meet with investors.
• traded securities of India-based issuers on behalf of U.S. investors
• participated in securities offerings from India-based issuers to U.S. investors.

SEC Sanctions. In the firms' respective settlements, they agreed to be censured while neither admitting nor denying the SEC’s charges.  All together, the firms will pay more than $1.8 million combined to settle the SEC’s charges, including:

• Ambit agreed to pay disgorgement and prejudgment interest totaling $30,910
• Edelweiss agreed to pay $568,347
• JM Financial agreed to pay $443,545
• Motilal agreed to pay $821,594.