Clamping down on brokerage firm Kassa Finvest for gross misconduct, stock exchange NSE today expelled the broker and 18 'associated persons' from various segments of the markets.
Last month, Sebi had also barred Kassa and its top executives from the capital markets following a large number of investor complaints for non-receipt of funds and securities against the broker.
Sebi has also asked the broker and its top executives to provide details of their assets and funds, while the general public has also been asked to report any violation by Kassa, which has been found to have diverted investors' money for funding its other business ventures.
In a circular issued today, NSE said that Kassa has been expelled by the exchange for violation of certain rules. Under these provisions, the exchange can expel a broker in cases of non-compliance, disobedience, disregard or evasion of NSE rules or those related to orders, notices, directions or decisions or rulings of the exchange or a relevant authority.
In its order, Sebi had said that Kassa raised funds by way of illegally selling the securities of its clients/investors and provided assured returns to its clients.
Along with Kassa, its directors -- Ashok Kumar, Umashankar Sharan Shrivastav -- and promoter Anjana Kumar, have also been barred by Sebi from securities market.
As per information submitted by NSE with Sebi, there were 195 pending investor complaints having a claim value of about Rs 38.13 crore against the broker, as on March 11, 2015.
Finding that Kassa had misused the investor money, Sebi said that "this is a case where effective and expeditious action is required to be taken not only to prevent any further harm to investors but also to send a stern message to prevent any person from indulging in acts as observed in this case".
Earlier, NSE, which had received large number of complaints against Kassa, had initiated an inspection.
The trading terminals of Kassa had been disabled in the capital market segment of NSE since November 19, 2014 due to shortfall in the minimum deposit requirement in the segment.
