SECP takes brokerage house to court for fraud
The SECP has filed a criminal complaint in a court against Cliktrade Limited, a securities brokerage firm.
The Securities and Exchange Commission of Pakistan (SECP) has filed a criminal complaint in a court against Cliktrade Limited, a securities brokerage firm, for not transferring shares/funds and unauthorised pledges of clients’ shares.
The commission has also brought to the court’s attention other prohibited activities under Section 24 (2) of Central Depositories Act of 1997 as well as offences under other relevant provisions of the Pakistan Penal Code.
Arrest warrants have been issued for eight accused members of Cliktrade, a former member of the Karachi Stock Exchange (KSE).
Customer complaints
The SECP had received a number of complaints against the brokerage house, which failed to comply with the commission’s directions to resolve the complaints and transfer shares into the respective Central Depository Company (CDC) accounts.
Consequently, on June 26 last year, the SECP suspended the registration of Cliktrade, along with four other brokerage houses.
The SECP appointed enquiry committees comprising officers from the Commission, KSE and CDC to inquire into the matters relating to unresolved complaints against the five brokers.
Scrutiny of records showed that the brokerage house without clients’ consent transferred shares and pledged them with a bank to obtain financing.
The finances so obtained were mostly used to liquidate liabilities of the brokerage house or its directors, their relatives and friends.
The brokerage house and its top officials also misused the powers given to them under the CDC sub-account opening form in moving or pledging the shares of their clients from their respective sub-accounts, resulting in losses to the clients.
On the basis of the inquiry report, on June 11, the SECP filed a criminal complaint in the court of the Session Judge, Karachi South, against Cliktrade and others. This is the second such complaint as the first was filed against Capital One Equities Ltd on April 5, 2010.
Phones disconnected
The enquiry report on Cliktrade and criminal complaint is available on the SECP website. The SECP has also finalised the enquiry reports in the matter of the remaining three expelled members of the KSE.
Based on these reports, legal action is being taken against those who were involved in prohibited activities.
This scribe tried to contact over the phone, all the offices of the brokerage house in Pakistan, including the head office of the company, to gain the brokerage house’s version on the matter. However, all the phones are now unlisted, while the website of the company is also now partially inactive. Attempts to reach its management also failed.
Published in The Express Tribune, July 16th, 2010.
The commission has also brought to the court’s attention other prohibited activities under Section 24 (2) of Central Depositories Act of 1997 as well as offences under other relevant provisions of the Pakistan Penal Code.
Arrest warrants have been issued for eight accused members of Cliktrade, a former member of the Karachi Stock Exchange (KSE).
Customer complaints
The SECP had received a number of complaints against the brokerage house, which failed to comply with the commission’s directions to resolve the complaints and transfer shares into the respective Central Depository Company (CDC) accounts.
Consequently, on June 26 last year, the SECP suspended the registration of Cliktrade, along with four other brokerage houses.
The SECP appointed enquiry committees comprising officers from the Commission, KSE and CDC to inquire into the matters relating to unresolved complaints against the five brokers.
Scrutiny of records showed that the brokerage house without clients’ consent transferred shares and pledged them with a bank to obtain financing.
The finances so obtained were mostly used to liquidate liabilities of the brokerage house or its directors, their relatives and friends.
The brokerage house and its top officials also misused the powers given to them under the CDC sub-account opening form in moving or pledging the shares of their clients from their respective sub-accounts, resulting in losses to the clients.
On the basis of the inquiry report, on June 11, the SECP filed a criminal complaint in the court of the Session Judge, Karachi South, against Cliktrade and others. This is the second such complaint as the first was filed against Capital One Equities Ltd on April 5, 2010.
Phones disconnected
The enquiry report on Cliktrade and criminal complaint is available on the SECP website. The SECP has also finalised the enquiry reports in the matter of the remaining three expelled members of the KSE.
Based on these reports, legal action is being taken against those who were involved in prohibited activities.
This scribe tried to contact over the phone, all the offices of the brokerage house in Pakistan, including the head office of the company, to gain the brokerage house’s version on the matter. However, all the phones are now unlisted, while the website of the company is also now partially inactive. Attempts to reach its management also failed.
Published in The Express Tribune, July 16th, 2010.