Markets regulator Sebi on Monday cancelled the registration of Crecer Financial Services as a stock broker for violating brokers' regulations. The regulator started investigation on the basis of the complaints received by the Reserve Bank of India, the NSE and the BSE stating that the broker was indulged in unauthorised acceptance of public deposits by promising to provide returns of 18-24 per cent per annum by investing in the some funds and the company was not registered with the RBI as a non-banking financial company.
The National Stock Exchange (NSE) in 2017 informed that on account of non-receipt of admission fee from the Crecer Financial, its membership rights on capital markets, futures and options and currency derivatives segments were revoked on September 1, 2015.
The BSE informed that Crecer Financial was not traceable at its registered office and correspondence office addresses as available with the exchange along with its directors and it could not be ascertained whether the broker was raising funds from investors and promising assured returns to them.
Pursuant to the investigation, Sebi found that Crecer Financial failed to maintain the requisite standards to be maintained as a stock broker stipulated in the brokers regulations.
Also, it had failed to provide any explanation with regard to the serious wrongdoing of collection of deposits from the public and failed to adhere to the principles of the code of conduct prescribed under the brokers' norms, which raised serious issues of probity, diligence, reputation and character of the member as a stock broker, it added.
Accordingly, the regulator directed that the membership right of Crecer Financial be withdrawn with immediate effect. Thus, the broker ceased to be a member of the BSE from February 19, 2018.
Sebi in its order stated that the acts and conduct of Crecer Financial and its directors have clearly rendered the broker to be not a 'fit and proper person'.
By doing so, it has violated the stock broker regulation and is liable for the cancellation of its stock broking registration, it said in an order.
In a separate order on Monday, Sebi has imposed a penalty of Rs 11 lakh on Adarsh Credit Co-operative Society Ltd for indulging in fraudulent trading in illiquid stock options on the BSE.
After observing large-scale reversal of trades in the illiquid stock options segment of the BSE, the Securities and Exchange Board of India (Sebi) conducted a probe in the segment between April 2014 and September 2015.By indulging in such activities, it has violated the PFUTP (Prohibition of Fraudulent and Unfair Trade Practices) norms, the regulator said.