The Securities and Exchange Board of India (SEBI) has suspended Karvy Stock Broking Ltd (KSBL) for a period of three months and Karvy Computershare Pvt Ltd (KCPL) for nine months - both entities held guilty of being party to the share allotment scam in initial public offerings.
Final order
SEBI passed the final order on June 22, 2007, against Karvy Stock Broking as a Depository Participant and also as a Stock Broker and Karvy Computershare as a Registrar to the Issue in the matter of IPO Investigations. In effect, Karvy Stock Broking has been suspended for a period of three months. This means that the depository participant business of the Karvy group has been barred from opening fresh demat accounts till December 31, 2007. SEBI’s order has also barred Karvy Computershare from acting as registrar to an issue for a period of nine months. As the share registry firm has already undergone the prohibition for that period following the initial SEBI order dated April 27, 2006 , there will be no further action against it.
 The Sebi order also said that other investigating agencies were probing the irregularities in the IPO share allotment process. 
The regulator has refused to accept that Karvy was unware about its clients alleged illegal activities.
“The manner in which certain sets of names have been used with change in surnames with systematic regularity for opening either bank account for financing or for opening fresh demat accounts for cornering the shares, which was fully in the knowledge of Karvy, should have definitely alerted them that there was something amiss or untoward about them. But the fact that such operations were carried out with unquestioning ease clearly demonstrates Karvy’s complicity in the  matter,” the order stated.