The recovery notice was sent to Maxgrowth Capital by SEBI for misutilisation of client securities and other disclosure lapses. On Wednesday, the notice was issued after the company failed to pay the fine imposed on it by SEBI. The penalty of Rs 15.61 lakh within 15 days includes interest, all costs, charges and expenses.

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If the company fails to pay the fine, the amount will recover by attaching movable and immovable properties of the entity. To raise funds by clients’ shares, which results in the misutilisation of a client’s securities. Between April 2018 and June 2019, SEBI observed this fraud during the investigation. Further, it produced records of intimation sent to clients regarding pledging of the securities.

In another case, an individual has been sent a recovery notice by the market watchdog in a case related to violating investment adviser rules in the matter of sharetipsinfo.com.