The massive scandal of the Hyderabad-based Karvy Stock Broking Limited (KSBL) that came to light in November has yet again highlighted the deep-rooted fraudulent practices in the stock market while prompting banks to take corrective measures in the loans against shares or securities system. While the market regulator has pegged the amount swindled to the tune of Rs 2,300 crore, an ongoing forensic audit by EY accountants, recently initiated by the National Stock Exchange (NSE), will put forward the real extent of misappropriation of funds. SEBI has prima facie found that the KSBL has misused its client’s securities by misusing the Power of Attorney (PoA) given to it by its clients. Therefore, the regulator directed the depositories and stock exchanges to initiate appropriate regulatory proceedings against the brokerage firm. Subsequently, both NSE and BSE banned Karvy from its operations.
— source newsclick.in | 11 Dec 2019