SECP files criminal complaint against bank’s employees

ISLAMABAD: The Securities and Exchange Commission of Pakistan (SECP) has filed another criminal complaint against three employees of the bank and their accomplices at the Karachi sessions court in continuation of its crackdown on insider trading.

“The employees accused of this grave offense were holding key positions as head of treasury and investment, dealer capital market and financial analyst, (who) were responsible for the bank’s capital market operations,” the Securities and Exchange Commission of Pakistan said in a statement on Wednesday.

“By virtue of their office, they had access to material information about the investment decisions of the bank in shares of companies listed on the Pakistan Stock Exchange.” The commission didn’t spill out the bank’s name and nor the names of the accused involved. 

It said the employees, while misusing their authority, passed inside information to certain clients of two brokerage houses for the purpose of insider trading. “This resulted in front running the orders placed by the bank in order to make personal gains, thus, making them insiders as defined under the 2015 Securities Act.”

The latest was the fourth criminal complaint in the Karachi sessions court. In March, SECP lodged another criminal complaint in a court against an employee of a leading bank for his alleged involvement in insider trading and minting multimillion rupees through illegal share transactions.

Besides, the commission is also taking action against brokerage houses for manipulation of share prices. It has so far lodged a number of complaints against brokerages and individuals. 

TheSecurities and Exchange Commission of Pakistan said crackdown on such malpractices would go a long way in protecting investors, raising government revenues by transforming the illegal into legal activity in the regulated and documented sector, and saving the foreign exchange currently being sent abroad.

It further said trading patterns of alleged clients of brokerage houses explicitly show possession of inside information because they effectively synchronise their orders with those of the bank. 

“Based on their illegal trading activity, these treacherous clients made huge gains while causing significant loss to the bank,” it added.

“This case depicts blatant violation of the relevant provisions of the 2015 Securities Act as the accused abused their positions by defrauding the bank and passed inside information to the accused clients.”