CMA suspends B Mathews Stockbrokers

February 27, 2009

, NAIROBI, Kenya, Feb 27- The Capital Markets Authority (CMA) has restricted Bob Mathews Stockbrokers limited from trading at the Nairobi Stock Exchange for 10 working days.

A statement from the CMA Chief Executive Officer Stella Kilonzo said on Friday that it has taken the action because the stockbroker has not been complying with the CMA regulations.

“The action follows intensified surveillance of the activities of the firm and all other market players,” Ms Kilonzo explained.

She said the Authority has also directed the Central Depository and Settlement Corporation not to approve the opening of any new CDS account by the firm.

Ms Kilonzo said this step has been taken in order to safeguard the interests of investors.

This announcement is taking place at a time when there are unconfirmed reports that several brokers are facing financial difficulties which are impacting negatively on their operations.

Cases of internal and external fraud involving both junior and senior members of staff in the brokerage firms and investments banks have become rampant in recent days.

Many of the firms still blame the challenges of the Safaricom IPO for their woes. However none of the players is willing to comment on the developments in the market for fear of triggering a panic attack.

The CMA is currently carrying out an audit on all the licensed players in the market with a view of determining whether they are financially sound and whether they have been adhering to the industry’s regulations. Those who have not been complying with the rules will be known when the exercise is concluded.

The erosion of investor confidence has seen them exiting the market in droves which has exacerbated the bearish run which has been experienced for nearly 10 months.

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