SEC puts freezes on 2,000 BO accounts
Tuesday, 03 June 2008

The Securities and Exchange Commission has frozen more than 2,000 beneficiary owner accounts on charges of violating securities law, an official said Sunday.

BO accounts are necessary for investors to trade in securities on the capital market, which have to be opened with banks against deposit accounts through brokerage houses.

The capital market regulator halted all share transfers of 2,436 BO accounts opened with different branches of Al-Arafah Islami Bank, SEC executive director Farhad Ahmed told reporters.

"The decision came after our investigations found some common factors from which we concluded that the BO accounts violated the Depositary Act," he said.

Farhad declined to specify the factors but said: "We think the accounts are improper."

The market regulator will summon the BO account holders for a hearing, added the SEC official.

According to the securities law, the SEC can fine up to Tk 10 lakh as penalty for violating the Depositary Act.

The SEC official said the regulator revealed the details by examining data of an IPO subscription.

"Our investigators with cooperation from the central bank found the suspicious factors by going through last year's IPO subscription data of Premier Bank," he said.

All kinds of share transactions from these BO accounts will be halted until further notice, added Farhad.

Thirty-six of the BO accounts were opened through Tarek Ibrahim & Co while Lanka Bangla Securities opened another 26, with ACS Company and Total Communications Ltd opening 13 and four respectively.

The rest of the accounts were opened through Anwar Securities

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