Sebi asks 22 brokers to cooperate with ongoing probe

Sebi today asked 22 stock brokers, who allegedly executed reversal trades to generate fictional profits or losses, to cooperate with the markets regulator in its ongoing probe and has also directed the exchanges to closely monitor their trading activities.
The two leading stock exchanges, BSE and NSE, have been directed to monitor the trading activities of these entities and report adverse findings, if any, about their conduct to Sebi immediately.
The Securities and Exchange Board of India (Sebi), in an order in August last year, had prohibited 59 entities, including these 22 brokers from securities markets for allegedly executing 'reversal trades' to generate fictional profits or losses and had also referred the case to the Income Tax Department for further investigations.

Following this, Sebi then identified all the trading members who had punched orders for such reversal trades and applied several parameters on them to shortlist 22 trading members and then subjected these 22 brokers to an independent and thorough examination.
After that, Sebi had restrained these entities from markets through an order passed in February this year.
Consequently, these entities had approached Securities Appellate Tribunal, which set aside Sebi's interim order against the 22 trading members.

On an appeal filed by Sebi, the Supreme Court refused to reverse the SAT order but asked the regulator to continue its probe and pass an order appropriately, after looking into the submissions made by the concerned parties.

In an order passed today, Sebi Whole Time Member Rajeev Kumar Agarwal said: The investigation in the entire scheme involving all the parties considered in the interim orders dated August 20, 2015 and February 17, 2016 is in progress."
"Considering the peculiar facts and circumstances of this case, I am not inclined to intervene in this matter by way of ad-interim directions at this stage and would prefer that the final view for appropriate action in accordance with law should be taken after completing ongoing investigation in the matter.The investigation shall be concluded expeditiously," he added.
Accordingly, he has now directed the 22 brokers to cooperate with Sebi in the ongoing investigation and provide all the information and documents that may be sought in this regard.