12th August 2006: The Securities and Exchange Board of India (Sebi) has barred broker Credit Suisse First Boston (India) Securities (CSFB) from carrying on its trade for a month for violating its code of conduct for brokers. The order takes effect from September 1.
Sebi found the firm, registered as a broker on both the NSE and the Bombay Stock Exchange, to have executed trades of another broker C Mackertich Ltd, or CML, which, it claimed, was acting as an unregistered sub-broker in violation of the law.
“By allowing CML to act as an unregistered sub-broker, CSFB has miserably failed to abide by the Code of Conduct prescribed for a broker. Further, the possibility that the very trades executed by CML through the terminal of CSFB forming part of the trades that led to the manipulation of the scrip of South East Asia Marine Engineering and Constructions can also not be ruled out. In any event, the fact remains that CSFB allowed its terminal to be misused by CML,” G G Anantharaman, whole-time member, Sebi, said in his order today.
According to the regulator, between June 01, 1999, and May 31, 2000, CSFB traded in the scrip on behalf of CML, its own partner company Kallar Kahar Investment, and another firm Milhill Investment Limited.
During the period, the share-price moved from Rs 15 to Rs 389 within eight months, it pointed out.