Stockbrokers, social media under SECP’s radar

FIA to jointly work to nab three brokers for generating artificial trading activities; two criminal complaints filed against senior employees of two banks involved in booking profits through insider trading; JIT likely to probe

ISLAMABAD: The Securities and Exchange Commission of Pakistan (SECP) has put under its radar three stock brokers and social media accounts of individuals who have been continuously manipulating the stock market, causing billions of rupees loss to investors.

Without naming the brokers, a senior official of the commission said that since January, these brokers are under the vigilant eye of the commission, and some social media accounts are also under vigil.

“Behaving like stock market ‘gurus’ and suggesting people regarding investments and disinvestments is illegal as this too is a form of manipulation called inducement, which is a crime under the Securities ACT 2015,” Yasir Manzoor, head of Market Surveillance, Supervision & Enforcement Department told media persons here at a workshop on insider trading and market manipulation on Tuesday.

“Among the latest form of market manipulation is giving false statement and this is mainly through social media,” he added, “The SECP was trying to keep an eye at such activity too and a list of 33 such links and pages have been forwarded to the FIA cyber crime.”

Out of this list eight such pages have become non-functional, but due to widespread use of mobile phone based social media apps, tracing all such groups seem to be beyond the capacity of the SECP.

The commission has started this campaign against the market manipulators which has not only been keeping an eye on the brokers market activities but also social media. There have been some social media accounts of individuals that are consistently and illegally inducing market and persuading people to purchase or sell certain companies’ shares.

There is an internationally recognised procedure for individuals to become certified analysts, but such unregulated activities could defraud people of their investments.

SECP has taken serious notice of the brokerage houses involved in placement and cancellation of orders showing misleading appearance in the market. Such kind of activity is termed as ‘spoofing’ internationally, which interferes with free and fair market, he said. The SECP has issued notices to three such brokers involved in generating artificial trading activities.

The commission has also filed seven criminal complaints this year against market abuses that includes insider trading, and two criminal complaints have been filed against senior employees of two banks [Bank of Punjab and Habib Metro Bank] who were involved in booking profits through insider trading. These individuals were working on these banks equity trading desks.

Manzoor said that it was the duty of the regulator to contain market manipulation and protect the investors. “It is also important because whenever there is market crash or when large number of investors face losses – everybody even media is criticising the regulator for not containing the market manipulators.

Meanwhile, Chairman SECP Zafar Hijazi said that the commission has zero tolerance against market manipulation. “We cannot control all manipulations – it cannot be controlled anywhere in the world but we can reduce it and discourage brokers and those in authority to misuse the law,” he added. He further said that the ten names of officials are under consideration of which one official will be nominated to be part of the joint investigation team (JIT) ordered by the supreme court to further probe the Panama case.