Islamabad, March 7, 2024 – In a resolute and far-reaching move, Pakistan has unleashed a barrage of stringent measures against individuals allegedly involved in manipulating the stock market.
The Securities and Exchange Commission of Pakistan (SECP) has embarked on a legal crusade, filing four criminal complaints against individuals in Lahore, including sponsors and management of a brokerage house, accused of orchestrating a nefarious scheme to manipulate stock prices.
The Banking Offence Court Lahore has swiftly responded by taking cognizance of all four complaints filed by the SECP, marking a pivotal moment in the relentless pursuit of justice and the eradication of illicit activities within the financial markets.
Media outlets are ablaze with revelations that the accused individuals conducted their dubious activities under the cloak of legitimacy, with registered office addresses conveniently located in Lahore. The allegations center around their purported involvement in manipulating the share prices of three listed companies over the course of 2019, 2020, and 2021. The conclusions drawn by the SECP are the result of meticulous investigations conducted under the purview of the Securities Act of 2015.
The probe unveiled a disturbing pattern of misconduct, with the accused parties engaged in the insidious practice of placing inflated buy orders and orchestrating trading activities amongst themselves. These manipulative maneuvers were calculated to artificially inflate the share prices of specific stocks, undermining the fundamental principles of fair market competition.
Adding to the gravity of the situation, the accused individuals were found to have entered fake buy orders and subsequently canceled a significant number of these transactions. This duplicitous tactic created misleading quotations, deliberately deceiving potential investors and distorting the true market value of the securities in question.
A more egregious charge that has been levied against the accused individuals is the fraudulent misuse of clients’ accounts. Large orders were executed with apparent intent to inflate demand for shares, enticing the public by generating a false sense of interest and demand in the market.
Under the punitive provisions of the Securities Act of 2015, market manipulation is unequivocally classified as a criminal offense, exposing the accused to the specter of imprisonment for up to three years and hefty fines of up to Rs 200 million.
The SECP, a bastion of unwavering commitment to maintaining effective supervision and enforcement, is leaving no stone unturned in ensuring the integrity of the capital market. This resolute crackdown on market manipulation serves as a testament to the regulatory authorities’ dedication to creating a fair and transparent financial landscape. The primary objectives include fostering investor confidence and, above all, safeguarding the integrity of the nation’s capital market from the insidious grasp of fraudulent practices.
This decisive action by Pakistan sends a resounding message to would-be offenders and underscores the unwavering commitment to ensuring that the financial ecosystem remains an equitable arena for all stakeholders. As the legal wheels turn, the nation awaits the outcome of these legal proceedings with bated breath, hoping for justice and a renewed sense of confidence in the robustness of Pakistan’s financial regulatory framework.
