Financial Daily from THE HINDU group of publications
Tuesday, Feb 14, 2006
Financial Daily from THE HINDU group of publications Tuesday, Feb 14, 2006 |
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Markets
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Regulatory Bodies & Rulings SEBI bars BLB from giving stock recommendations Our Bureau
Mumbai , Feb.13 SEBI has barred stock broking outfit BLB Ltd from making any recommendations about stock market investment after it found the firm guilty of making misleading `buy' recommendation relating to VBC Ferro Alloy Ltd. The broking outfit bought huge quantity of the shares before the recommendation and sold the stocks after the recommendation, SEBI said. Inspecting on the misleading recommendations to the public on stock picks, SEBI said it observed that the "research wing of BLB Ltd (a SEBI registered broker with BSE and NSE) had given "strong buy" recommendation on the shares of VBC Ferro Alloys Ltd in one of the leading financial dailies on September 12, 2005," a SEBI order dated February 10, said. The analysis of the trading in the shares of the company by BLB revealed that BLB purchased a large quantity (3.72 lakhs) of the shares of the company prior to its `strong buy' recommendation about the company's shares in the media and sold around 1.61 lakhs shares after the recommendation and thereby made substantial gains, the SEBI order said. "The sudden buying interest led to the price of the scrip moving from Rs 118.45 on September 1, 2005 to Rs 176.50 on September 6, 2005 and may have possibly acted as a catalyst in attracting the attention of the investors towards this share," SEBI said. SEBI also asked the depositories not to effect any transfer of shares of VBC Ferro Alloy Ltd, lying in the beneficial owner accounts of the BLB Ltd, and Mr Vikram Rathi, its Executive Director.
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