The Securities and Exchange Board of India (Sebi) has suspended the registration of Alka Securities Ltd (ASL) for two years, saying the brokerage firm acted in “utter disregard” of its directions on taking new clients.
The market regulator, in an order on October 8, said it would suspend the certificate of registration of ASL for a period of two years. In another order on the same day, Sebi suspended the entity for a period of two months.
“Both the orders shall operate concurrently,” Sebi noted. According to the regulator, Alka Securities has “acted in utter disregard of its directions and adopted fraudulent activities to cover up its violation”.
Sebi further said the stock borker was involved in multiple defaults and violations and different enforcement actions have been taken against it by the regulator.
The regulator found the brokerage firm had traded on behalf of two new clients -- Anna Adhikarao Gaikwad and Jayant Shah -- on March 30, 2010, April 06, 2010 and April 07, 2010 on the National Stock Exchange (NSE) despite Sebi directing to the company not to take fresh clients were in force.
After conducting a probe in the stock trading of ASL during November 2008 to March 2009, Sebi through in its interim order dated July 28, 2009 had issued various directions to the firm including not to take fresh clients with immediate effect, until further orders.
Moreover, the directions issued in the interim order against were confirmed by Sebi's via an order dated October 16, 2009. In the two months suspension case, Sebi said ASL failed to show compliance with various provisions related to stock broker norms. "ASL had allegedly not maintained register of securities and had not transferred the shares to the respective client within 24 hours of the pay-out," Sebi had found. "It (ASL) had also mis-utilised client securities, accepted shares from other than the respective clients, allotted multiple client codes, submitted wrong details and produced fabricated KYC details, etc.," it had added. PTI