rediff.com: Sebi suspends CSFB broker registration for 2 yrs

Securities and Exchange Board of India has suspended the registration of Credit Suisse First Boston Securities Pvt Ltd as a broker for two years with effect from April 18, 2001 for trying to distort the true price discovery and manipulate the securities market.

Sebi chairman G N Bajpai, after taking into consideration the enquiry report, reply of CSFB and submissions made during hearing vide its order dated June 13, 2002, suspended the registration of the broker, a Sebi release said in Mumbai on Monday.

Sebi had ordered an investigation into transactions during January 2001 to March 2001, due to excessive volatility in the index of Bombay Stock Exchange and National Stock Exchange and unusually volatile market behaviour during mid February 2001 to mid March 2001 and also in view of possible attempts by certain entities including CSFB to distort the true price discovery and manipulate the securities markets.

Sebi, through an interim order dated April 18, 2001 passed u/s 11, 11B of Sebi Act, had restrained CSFB from undertaking any fresh business as a stock broker till the completion of investigation/enquiry proceedings.

Sebi also appointed an enquiry officer (order dated June four, 2001) to enquire into the violation of the Sebi (Prohibition of Fraudulent and Unfair Trade Practices relating to the Securities market) Regulations, 1995 and Sebi (Stock Broker and sub broker) Regulations, 1992, by CSFB.

After holding an enquiry, the officer (report dated April 19, 2002) found CSFB guilty of violation of Regulation 4(b), (c), (d) of the Sebi (Prohibition of Fraudulent and Unfair Trade Practices relating to the Securities market) Regulations, 1995 and Regulation 7 of the Sebi (Stock Broker and sub broker) Regulations, 1992 and recommended suspension of the registration of CSFB as a broker for two years.

The enquiry officer also recommended that in calculating two years, the period of restraint order from April 18, 2001, be taken into account.



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