![The market watchdog also found that the brokerage firm did not meet the standards set out in the brokerage regulations. The market watchdog believes that the brokerage company does not meet the standards set by the brokerage regulations.](https://images.news18.com/ibnlive/uploads/2021/07/1627283897_news18_logo-1200x800.jpg?impolicy=website&width=510&height=383)
The market regulator determines that the brokerage firm does not meet the standards set out in the Intermediary Regulations.
Sebi cancelled the registration of LFS Broking and banned its MD from being employed or associated with any registered broker for a period of five years.
Market regulator Sebi on Friday canceled the registration of LFS Broking and banned MD Saiyad Jiyajur Rahaman from being employed by or associating with a registered broker for five years for allegedly violating market norms.
The regulator also cancelled LFS Broking's registration as a stockbroker, portfolio manager, depository participant and research analyst.
“I take note that Notice No. 2 (Saiyad Jiyajur Rahaman) has not acted with integrity and honesty and has not exhibited ethical conduct and fairness and therefore he is no longer a fit and proper person in terms of the Intermediaries Regulations,” Sebi said in the 56-page order, written by former member Kamlesh C Varshney.
Sebi also observed that LFS Broking conspired with Rahman to illegally raise funds by duping investors using the registration certificate.
The market watchdog also found that the brokerage firm was not meeting the standards set out in the brokerage regulations.
During the probe, the regulator also found that LFS Broking's Sebi registration was misused to promote LFS-PMS and another unregistered entity, MOL Commodities, which raised significant funds from investors through various bank accounts managed by Rahaman.
Notably, transactions totaling Rs 9.3 crore were made from Rahaman's account, including transfers to LFS Broking's own trading account.
Sebi noted that LFS-PMS mobilised Rs 266 crore from 6,219 customers, many of whom did not execute any trades in the securities market.
Additionally, the accounts of LFS-PMS and MOL Commodities, which hold funds from numerous investors, exhibited significant financial activity without appropriate agreements or compliance.
Complaints were filed against Sevier that Rahaman's private company, LFS Broking and PMS Services (LFS-PMS), was operating investment schemes with guaranteed returns and was operating legally under the guise of registration granted to brokerage firms by regulators. After filing, this order was issued.
The present proceedings stem from an investigation report dated September 20, 2023. The Designated Authority (DA) recommended cancellation of the registration granted to LFS Broking in various capacities and also recommended that Rahaman be disqualified from being a registered broker for a period of five years.
(This story has not been edited by News18 staff and is published from the syndicated news agency PTI feed.)