On a reference filed by the Securities and Exchange Commission of Pakistan (SECP), the National Accountability Bureau (NAB) has arrested Hassan Waheed Khan, Director AWJ Securities Private Limited, on Tuesday and raided the company office to seize all the relevant records.
NAB Rawalpindi presented the arrested director of the said brokerage at NAB court on Wednesday and secured a 10-day physical remand for investigations. The brokerage house is accused of defrauding public at large. On a reference from the Chairman SECP Zafar Hijazi, NAB has started extraordinary investigations over the default made by two brokerage houses; M.R. Securities (SMC-Private) Limited and AWJ Securities Limited.
Two weeks ago, on the sudden closure of business by a Lahore-based stockbroker, the chairman SECP called an extraordinary meeting of the commission to review the situation arising out of brokers’ default. During this unusually lengthy meeting, the commission decided to take all measures required to stop such deceitful and corrupt business practices.
SECP chairman also took up the matter with PSX board and convinced them to play their due role as the front line regulator. Responding to SECP’s call, the PSX board suspended its Chief Regulatory Officer, launching a detailed inquiry and announced a number of steps to streamline business activities of stockbrokers and safeguard investors’ interests. SECP had appreciated the immediate action by PSX and termed it as a vital step for strengthening the stock market.
Prior to this, the SECP sent an investigation team consisting of eleven officers to raid MR Securities office to inspect and seize all records of the firm. The five-day investigation revealed that the brokerage was involved in unauthorised trading, illegal deposits, and non-payment of cash, non-delivery of securities to investors as well as non-compliant with the requirements of segregation of client assets. The addresses, emails and phone numbers maintained by the broker were also fake and incorrect.
Considering the sensitivity of the matter, the SECP chairman held a meeting with chairman NAB and requested him to take immediate action against the defaulting brokers. On the instructions of NAB chairman, the Rawalpindi NAB has started immediate investigations against AWJ Securities and arrested Hassan Waheed Jan.
