Issuing undated and unsigned circular by stock broker containing statements contrary to terms of sanction by Controller of Capital Issues ‑ Whether attracts penal provisions
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Misleading circulars by underwriters may attract penal liability under offer-and-sale provisions, prompting stricter exchange oversight.
Issuance by a stock broker firm of an undated, unsigned circular containing statements materially contrary to the terms under which a capital issue was sanctioned can fall within the penal provisions governing the offer and sale of shares; stock brokers acting as underwriters are required to observe a strict code of conduct and exchanges are expected to monitor and act on such conduct.