IPO-bound invest tech startup Groww has settled a case pertaining to technical glitches with SEBI by paying INR 34.1 Lakh.
The case originated from a technical glitch that Groww’s brokerage platform faced on January 23, 2024. In a showcause notice sent to the startup, SEBI alleged that the platform did not publish "full and true disclosure" on time to the exchange on LAMA.
Notably, Log Analytics and Monitoring Application (LAMA) is a framework launched by the SEBI to address “technical glitches” in stockbroker’s electronic trading systems.
“Applicant did not have telephone lines, trading terminals, employees for attending trading calls of clients, required during technical glitches, thus resulting in complete denial of service to all clients during the glitch period; and the Applicant's VAPT (Vulnerability Assessment and Penetration Testing) process was ineffective,” SEBI noted in its settlement order dated May 13.
The regulator sent Groww a showcause notice regarding the discrepancies on October 11, following which the fintech major proposed to settle the case, without admitting or denying SEBI’s findings.
This wasn't the first time Groww found itself under the scrutiny of the markets regulator. In June 2024, the startup paid INR 9 Lakh to SEBI to settle a case related to alleged violation of norms regarding disclosures for its investment arm Groww AMC.
Glitches Galore At Groww, Zerodha
The technical glitch in questions resulted in Groww’s users unable to transact using the most popular Indian brokerage’s platform for hours during market hours on January 23.
A couple of days after the glitch, Groww CEO Lalit Keshre took to X to apologise for the glitch.
“Technical issues happen in our industry, and we have also faced them in the past; the last major one was on April 6, 2023. And each one of them still hurts and remains like a scar. However, this time, it hurt a lot more,” Keshre said in a post on X on January 25, 2024.
The cofounder also said that Groww could “have communicated promptly” with its users.
Meanwhile, the startup suffered yet another glitch yesterday, which resulted in discrepancies in stock prices. Groww acknowledged the "temporary" issue in a post on X. "For those customers whose GTT (Good Till Triggered) has been triggered due to this, Groww support team is reaching out and offering a resolution," it added.
Besides Groww, there have been multiple instances of glitches with the trading platforms of brokerages like Angel One, Zerodha and Upstox.
For instance, Groww’s closest competitor Zerodha faced an outage in June 2024, resulting in users unable to place new stock trade orders or modify existing ones. It was the second such outage for the platform in that month.