SMS scam: Sebi bars 2 individuals from capital market

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Sebi barred two individuals from dealing in capital market in a case related to a large scale SMS scam (Reuters) Sebi barred two individuals from dealing in capital market in a case related to a large scale SMS scam (Reuters)
SummaryImtiyaz Hanif Khanda and Vali Mamad Habib Ghaniwala were providing unauthorised intra-day tips

Sebi today barred two individuals from dealing in capital market in a case related to a large scale SMS scam, wherein some entities were found to be luring gullible investors with promise of daily returns of up to Rs 75,000 through mobile messages.

Earlier this year, the Securities and Exchange Board of India (Sebi) had prima facie found that Imtiyaz Hanif Khanda and his maternal uncle Vali Mamad Habib Ghaniwala were providing unauthorised intra-day tips and stock advisory services through Short Message Services (SMSs) via mobile phones.

Based on its preliminary probe the market regulator had restrained both of them from securities market, among others, by way of an interim order on August 20, 2013.

In its latest order today on the case, Sebi has confirmed its interim order on Imtiyaz and Vali, saying that the duo "have not been able to show sufficient and plausible cause to draw any inference other than those drawn in the interim order with regard to their activities in the securities market".

The market regulator also noted that "the continuance of the noticees in the stock market will adversely affect the interest of the investors and will have long term impact on the integrity of the securities market".

"...hereby confirm the directions issued in respect of Imtiyaz Hanif Khanda (proprietor of Right Trade and Sai Traders)and Vali Mamad Habib Ghaniwala (proprietor of Bull Trader and Laxmi Traders) vide ad-interim ex-parte order dated August 20, 2013," Sebi said.

After its preliminary probe found that the duo had "acted in fraudulent and deceitful manner" and violated various regulatory norms, Sebi in its interim order had restrained them from accessing the securities market, till further directions.

Imtiyaz and Vali had also been asked to "cease and desist" from acting as investment advisors and portfolio managers as well as to immediately withdraw and remove all their advertisements and other materials in relation to their advisory services.

Sebi had noticed that certain entities were offering intra-day tips and stock advisory services through SMSs.

The messages being circulated by them included promises of Rs 5,000-75,000 daily earnings in "equity and MCX market with our confirm intraday tips" and the investors were asked to call on given numbers for "sure shot call".

This is the first major case where Sebi has used its newly granted powers to access call data records of suspected persons, which it has got through changes made in the norms governing the securities markets

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