SEBI Slaps Rs1 Lakh Penalty on Integrated Master Securities for Furnishing False Call Recording in Mastek Case

Moneylife Digital Team 20 August 2025

Investor Interest

Market regulator Securities and Exchange Board of India (SEBI) has imposed a monetary penalty of Rs1 lakh on Integrated Master Securities Pvt Ltd for providing false and misleading information during an investigation into trades in the shares of Mastek Ltd.

Mastek, listed on Bombay Stock Exchange (BSE) and National Stock Exchange (NSE), came under SEBI scrutiny for possible irregularities in trading activity between December 2022 and August 2023. As part of its probe, SEBI examined the role of Integrated Master Securities which is registered as a stock broker with the regulator.

SEBI investigation revealed that the broker failed to maintain original call recordings of client orders, a regulatory requirement and instead submitted recreated recordings. Initially, the broker informed SEBI that the recordings for the July 2023 trades were unavailable. However, on 2 January 2025, it submitted 14 audio files, claiming them to be the original records.

On verification, SEBI found that these calls were not genuine recordings from the trade period but were recreated on 31 December 2024. Evidence from call data records, WhatsApp messages and recorded statements confirmed that the calls were fabricated in coordination between the broker’s staff and employees of its client, SG Realtor Pvt Ltd (SGRPL). Notably, the phone number used to place the recreated calls had not been registered with the broker during the relevant trade period.

In its defence, the broker admitted that the original recordings could not be located and argued that the recreated calls reflected the same orders placed earlier, thereby not misleading the regulator. It also claimed that there was no intent to deceive mens rea and that its actions were bona fide.

However, SEBI rejected these arguments, citing established judicial precedents that intention is not a prerequisite for imposing penalties under the SEBI Act. The regulator stressed that providing fabricated evidence in place of original records amounted to furnishing false and misleading information, in violation of Section 11C(3) of the SEBI Act.

While SEBI acknowledged that no disputes had been raised by the client regarding the trades, it clarified that brokers are legally bound to maintain call recordings of telephonic orders for at least three years, irrespective of whether disputes arise. Although some benefit of doubt was extended regarding alleged violations of circulars on record maintenance, SEBI held that the broker’s act of furnishing recreated recordings during an investigation constituted a serious breach of regulatory obligations.

Consequently, SEBI imposed a penalty of Rs1 lakh under Section 15A (a) of the SEBI Act, reinforcing its stance that intermediaries must fully comply with statutory requirements and cooperate truthfully during investigations.

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