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Markets regulator Sebi today barred Integrated Master Securities Ltd (IMSL) from accepting fresh clients for two months for violating stock broking norms with respect to trading in shares of Gangotri Textiles.
"I hereby direct that Integrated Master Securities Ltd shall be prohibited from accepting fresh clients, as a stock broker, for a period of two months," Sebi Whole Time Member G Mahalingam said in an order.
A probe conducted by Sebi in the share trading of Gangotri Textiles during April-May 2006 had found that certain entities allegedly functioned as a group (Vishvas Group) and by trading through their respective stock brokers or otherwise, had allegedly executed synchronised, circular as well as reversal trades among themselves.
Cosmo Corporate Services and Master Finlease, who were clients of IMSL, had allegedly executed illegal synchronised and circular trades in the scrip of Gangotri Textiles.
"I am of the opinion that the persistence of trading by Cosmo and Master and the proximity of time between orders in a scrip which was otherwise illiquid should probably have alerted IMSL," Mahalingam said.
"...Placing of orders in close succession of time and date, in scrips which, based on fundamentals, would not by itself generate any investor interest, ought to have aroused the suspicion of a vigilant broker," he added.
The Sebi Whole Time Member said that IMSL, as a stock broker, can be said to be in breach of the provisions of the stock brokers regulations by not exercising proper care and diligence.
(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)