Sebi cancel's broker registration for illegal trading

Dec 07 2012, 22:19 IST
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Capital market regulator Sebi Capital market regulator Sebi
SummarySebi said Chotai failed to perform its duties as specified in the code of conduct for sub-brokers in the Broker Regulations.

Capital market regulator Sebi has cancelled the registration of a Samir K Chotai as a stock broker for allegedly indulging in illegal trading activities that were not in the interest of the investors.

In its order, Sebi said Chotai failed to perform its duties as specified in the code of conduct for sub-brokers in the Broker Regulations.

"...hereby cancel the certificate of registration of the sub broker namely Samir K Chotai (trade name Om Shares and Securities)," Sebi said in its order issued on December 6. Sebi said Chotai had executed trades outside the trading mechanism provided by BSE.

The regulator said it also observed that the enquiry report on the matter had noted that Chotai had attempted to persuade BSE officials for not reporting the findings of inspection to Sebi.

"Such attempts are unethical and unsuited to an intermediary who shares the responsibility of developing the securities market along with the regulator," Sebi said.

Sebi on receipt of certain complaints regarding illegal trading activities at Porbandar (Gujarat) advised the BSE to probe the entities concerned.

Accordingly, BSE carried out inspection of Chotai, a registered sub-broker operating under the trade name of Om Shares and Securities on June 28, 2004, the order said.

The inspection prima facie revealed that Chotai had indulged in illegal activities that were not in the interest of the investors.

Pursuant to the findings by BSE, Sebi in an interim order prohibited Chotai from accessing the securities market till the probe is completed and appropriate action taken upon receipt of the enquiry report.

The enquiry report submitted on March 8, 2011 recommended a penalty of cancellation of the Certificate of Registration of Chotai.

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