Angel One Settles SEBI Case for ₹4.28 Crore Over Monitoring Lapses

Leading brokerage firm Angel One has reached a settlement with the Securities and Exchange Board of India (SEBI) regarding regulatory lapses in supervising its authorised persons. The company has paid a settlement amount of ₹4.28 crore to resolve adjudication and enquiry proceedings initiated by the market regulator.

Regulatory Lapses in Monitoring Authorised Persons

The SEBI proceedings centered on the company's failure to adequately monitor and supervise the activities of two specific authorised persons (APs), Deepankar Barman and Nadella Srinivas Rao. Following show-cause notices issued in May 2025, the regulator alleged that Angel One failed to implement robust oversight mechanisms to identify and act upon violations committed by these intermediaries.

The regulator's scrutiny revealed significant gaps in the brokerage's due diligence processes. Specifically, SEBI alleged that the firm failed to detect unauthorised fund collection activities and did not conduct sufficient inspections to identify irregularities. Despite observing disproportionate trading patterns associated with these APs, the company reportedly failed to take appropriate corrective measures.

Unauthorised Activities and Social Media Violations

A critical component of the SEBI investigation involved the misuse of the brand and improper client engagement. One of the authorised persons was flagged for engaging in unauthorised social media activities, which included making illegal promises of "assured returns" to potential investors.

Furthermore, the individual was allegedly involved in unauthorised portfolio management services while using the Angel One brand name and logo without proper authorization. This lack of scrutiny over digital activities highlighted a significant loophole in the firm's compliance framework regarding how its intermediaries represent the brand in the public domain.

Technical Red Flags and Compliance Failures

The investigation into Nadella Srinivas Rao uncovered more technical irregularities. SEBI noted that the brokerage failed to conduct necessary inspections despite evidence of large-scale fund collections and disproportionate trading volumes. Alarmingly, the regulator flagged instances where multiple client orders were allegedly placed through the same IP and MAC addresses, suggesting potential manipulation or irregular handling of client accounts.

Additionally, SEBI alleged that both authorised persons were actively trading through other stockbrokers—a fact that Angel One failed to identify through its existing monitoring systems.

The Settlement Process

To resolve the matter without prolonged litigation, Angel One filed settlement applications in 2025. Under the terms of the settlement, the company did not admit to or deny the findings of the regulator. Following a review by SEBI's Internal Committee and subsequent approval by the High Powered Advisory Committee and a panel of Whole Time Members, the company agreed to the ₹4.28 crore penalty.

The brokerage remitted the full settlement amount on May 22, 2026, leading to the formal disposal of the adjudication and enquiry proceedings under the SEBI Settlement Proceedings Regulations.

Key Takeaways