The capital market regulator SEBI attached demat accounts and mutual fund folios worth Rs 15 crore of Karvy Broking and former director to recover Rs 25 crore penalties imposed on the stock brokerage house. The regulator also took against the former managing director of the brokerage firm Comandur Parthasarathy to recover Rs 9.44 crore.
The penalties were intended to deter future misconduct and recover the losses incurred by investors.
The market watchdog ordered action on Karvy Stock Broking and its former managing director Comandur Parthasarathy to recover outstanding penalties of around Rs 25 crore imposed last April after failure to pay the penalties imposed after SEBI probe found brokerage firm misused client securities and funds, leading to substantial losses for investors.
The market regulator said that it had sufficient reasons to believe that defaulting brokerage house and the managing director may dispose off their securities/instruments in the demant account/accounts, mutual fund folios and funds held in the bank accounts obstructing recovery of the dues.
The investigation had found that the brokerage firm had wrongfully pledged its customers’ securities to obtain loans for its own purposes and inappropriate use of funds by the brokerage firm violated regulatory guidelines.
