The Securities and Exchange Commission of Pakistan (SECP) has filed a criminal complaint against a leading brokerage house for indulging in price manipulation activity called “spoofing”. The SECP did not disclose the name of the brokerage house in the press release here on Friday.
Based on an investigation spanning 2014 and 2015, the SECP found that a brokerage house and some of its clients were involved in price manipulation of a number of scrips by way of placing a large number of non-bona fide orders of small quantity in pre-open session, placement of buy orders at upper lock in pre-open session and subsequently cancelling the buy orders placed in pre-open session right at the start of the trading session, thereby creating artificial trading activity.
The accused broker has also been found placing buy orders of a huge quantity just before the close of the market to entice general investors by creating an artificial demand for the shares and subsequent placement of sell orders to sell their holding at a beneficial price. Subject activity resulted in substantial gains for the broker and its clients. It may be noted that market manipulation is a criminal offence, and it has been defined in Section 133 of the 2015 Securities Act.
It is one of the major criminal complaints filed by the SECP in the recent past, showing the SECP’s firm resolve for zero tolerance towards market abuse and any malpractices in the stock market.
