Tuesday, June 18, 2002
MARKETS
Credit Suisse broking licence suspended
Our Markets Bureau in Mumbai
The Securities and Exchange Board of India has suspended the registration of Credit Suisse First Boston (CSFB) for two years with effect from April 18, 2001. Thus CSFB will not be able to carry on its brokerage business in the country for two years. This follows a Sebi investigation that found the foreign brokerage guilty of "following fraudulent and unfair trade practices" as well as violating Sebi' s regulations for brokers. Sebi had undertaken investigations into the brokerage's activities during January-March 2001, and found that it had "manipulated the market" in connivance with broker Ketan Parekh "through synchronised trades". Sebi had also passed an interim order on April 18, 2001, restraining CSFB from undertaking any fresh business as a stock broker till the completion of the investigation. This order was confirmed through another order on June 4, 2001. Sebi chairman G N Bajpai passed the final order on June 13, 2002, confirming the April 19 recommendations of the inquiry officer, who had held 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. Reacting to the Sebi order, CSFB chief K R Bharat said in a statement, "The firm is reviewing the terms of the ruling carefully and shall consider all recourse available to it." Admitting to being very disappointed with the outcome, Bharat said, "However, CSFB respects and will abide by the ultimate outcome of the Indian regulatory and legal process as with the regulatory and legal processes in all jurisdictions in which it operates globally." He also said the firm remained committed to its Indian clients and its international clients investing in India.
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