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Sending a tough message to the market participants, India's market regulator Securities And Exchange Board of India (SEBI) has banned 24 operators including brokers, banks and depository participants from the stock markets for their involvement in the IPO scam. The brokers banned include biggies like Indiabulls and Karvy Stock Broking. Twelve depository participants (DP) have been banned from opening fresh accounts. It has also banned 85 financiers from capital market activities.

Releasing a 256-page interim order, SEBI said all those involved in the scam would be prosecuted. It investigated the abusive practices in 105 IPOs (including that of Maruti and Suzlon) floated between 2003 and 2005. The interim order is in the nature of show cause notices and the parties can file their objections within 15 days with Sebi.

The background of the scam is that some market participants had allegedly connived with certain investors who violated the law by applying for IPOs using multiple demat accounts to corner higher allocation.

Go to article in Business Standard

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