Money & Banking

Citibank fraud: Sebi probes violation in income proof rules

PTI New Delhi | Updated on January 06, 2011 Published on January 06, 2011

BLMJM_CITI_NY_BRANCH   -  Business Line

In connection with the alleged Rs 300-crore Citibank fraud, Sebi is probing whether the stock brokers collected from the accused his income proof documents, a mandatory requirement for trade in derivatives market.

The market regulator had made it mandatory in December 2009 for the brokerage firms to collect income proof documents from all their clients before allowing them to trade in derivatives segment of the market.

The preliminary investigations into the alleged fraud committed by Shivraj Puri, a senior employee at a Citibank branch in Gurgaon, has found that he diverted his clients’ money into derivatives market.

Investigative teams from Sebi have already more than once questioned Puri as well as other parties connected to the fraud, including the officials from the bank and the two brokerage firms used by Puri —— Religare and Bonanza.

As per the preliminary probe, Sebi has found lapses on part of the brokerage firms in collecting all the required financial documents from Puri and others through whose accounts he invested in stock market, a senior official said.

The brokers have been asked by Sebi to furnish all the documents that they had collected from Puri, subsequent to which the regulator would check their veracity.

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Published on January 06, 2011
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