The Securities and Exchange Commission of Pakistan has issued a relatively substantial fine to a broker and two of his relatives for front running and insider trading. The PKR5m penalty (USD$57,000) sends out a strong message to the market in Pakistan. The action was the latest in a series resulting from the SECP’s ‘stringent surveillance practices to cut abusive market practices.’
The regulator issued three more penalties to directors and beneficial owners of firms for filing late returns. One individual was on the receiving end of a show cause notice for submitting multiple applications and another for breaching the SECP rules.
The regulator has not named the individuals or entities implicated in the front running/insider trading breach. Naming and shaming is a tactic employed by regulators worldwide and is an effective deterrent to regulatory breaches. On an individual level, reputational damage often counts for more than at a corporate level.
In March, a law firm employee paid the Monetary Authority of Singapore S$50,000 in an out of court settlement for insider trading.
Published by the author on CKPblog Thu, September 15 2011 14:16