Capital markets watchdog Sebi today suspended brokerage firm MKM Finsec for five years for indulging in 'fraudulent activities' as well as for failing to provide information sought by it.
The Securities and Exchange Board of India (Sebi) said MKM Finsec was involved in "fraudulent activities by issuing fictious contract notes and difference bill vouchers etc with the sole intention to facilitate some steel manufacturing companies to manipulate their book of accounts."
It also "executed off-market transactions without intimating the stock exchange".
Besides, the regulator said that MKM Finsec has failed to provide the documents regarding copy of bank statement of the clients, KYC of their clients, which were vital for the investigation.
By indulging in such activities, MKM Finsec has violated the provisions of PFTUP (Prohibition of Fraudulent and Unfair Trade Practices) regulation as well as code of conduct prescribed for stock broker under broker norms.
"Such acts, aimed at diminishing the integrity and fair functioning of the securities market are not expected from a registered market intermediary, who is required to exec rise due skill, care and diligence in the conduct of all his business," the regulator noted.
Accordingly, Sebi has suspended the "certificate of registration of MKM Finsec ....For a period of five years."
This order shall come into force after 21 days, it added.
