SEBI Considers Settlement for Brokers in TradeTron Case, Consolidated Payout Could Reach Rs 2.4 Crore

The settlement amount is anticipated to range between Rs 1 lakh and Rs 2 lakh per broker, the people said. The total settlement amount could range between Rs 1.2 crore and Rs 2.4 crore if all the brokers involved decide to settle, as per NDTV Profit's calculations.

The people associated with the matter told NDTV Profit that the proposed settlement option would be available to brokers as a group rather than on an individual basis.

The move is expected to proceed if a majority of brokers choose to participate, offering them a way to resolve the matter without undergoing the lengthy adjudication process.

The development follows a notice issued by SEBI last month to 122 brokers associated with TradeTron, a platform that allows users to automate their trading strategies. The notice is part of a broader investigation into whether these brokers violated SEBI’s regulations, particularly a 2022 circular that prohibits brokers from partnering with platforms promising assured returns.

Sources close to the matter told NDTV Profit that brokerages are keen on settling with SEBI to avoid the lengthy and resource-intensive adjudication process. However, formal settlement requests still need to be submitted to the regulator before the scheme can be officially implemented.

SEBI’s inquiry has drawn attention to concerns that TradeTron may have been involved in facilitating trading strategies that promised guaranteed profits—something that is in direct violation of SEBI's strict guidelines. 

According to the regulator’s rules, brokers are prohibited from associating with any entity offering such guarantees, as stipulated under Regulation 9(f) of the SEBI (Stock Brokers and Sub-Brokers) Regulations, 1992. This regulation mandates that brokers maintain a strict code of conduct, ensuring that they do not engage in practices deemed risky or non-compliant.

Notably, some of the well-known brokerages named in the investigation include Zerodha, Motilal Oswal Financial Services, Bajaj Financial Securities, and 5Paisa Capital. These companies, along with others, now face scrutiny over their involvement with TradeTron and the potential breach of SEBI’s regulatory framework.