Fraud: SECP takes brokerage houses to court

ISLAMABAD: The Securities and Exchange Commission of Pakistan (SECP) has filed criminal complaints in a court against M.K.A. Securities and Prudential Securities, former members of the Karachi Stock Exchange for not transferring shares/funds and for their unauthorised pledges of clients’ shares and other prohibited activities under the Section 24 (2) of Central Depositories Act 1997 as well as offences under relevant provisions of the Pakistan Penal Code. The arrest warrants have been issued for all 12 accused. The SECP had received many complaints against them. They failed to comply with the SECP directions to resolve complaints and transfer shares into respective Central Depository Company accounts. The records revealed that they, without clients’ consent, transferred shares and pledged them with the bank to obtain financing. The finances so obtained were mostly used to liquidate liabilities of brokerage houses or its directors, their relatives and friends.

Published in The Express Tribune, August 23^rd,  2011.