Securities and Exchange Commission of Pakistan (SECP) has decided to take firm action against all online investment ‘gurus’. Such individuals regularly share their opinions on the stock market on social media channels.
Head of the SECP’s Market Surveillance, Supervision and Enforcement Department, Yasir Manzoor, said “Behaving like stock market gurus and making suggestions about investments are illegal. This is a form of manipulation called inducement, which is a crime under Securities Act 2015.”
According to market surveillance head, there are many types of market manipulation techniques such as pump-and-dump, wash trade, spoofing and false statements.
These ‘gurus’ make regular fake statements through social media, affecting market trends
He added, “One of the latest forms of market manipulation is issuing a false statement mainly through social media. The SECP is trying to keep a check on such activities. A list of 33 such links and pages has been forwarded to the Federal Investigation Agency (FIA).”
According to Yasir Manzoor, it is the regulator’s responsibility to restrain market manipulation and protect the investors’ interests. “It is also important because whenever the market crashes or a large number of investors face losses, everybody criticises the regulator for not acting against market manipulators,” he added.
SECP has taken notice of some brokerage houses who are involved in the placement and cancellation of orders to create fake impressions of trading activity, he told the media. Such a tactic is referred to as snooping.
SECP has filed complaints against seven parties and two senior employees
To reduce market manipulation, the SECP has filed criminal complaints against seven parties for market exploitations during the current year. Two senior employees have also been allegedly involved in booking profits though insider trading. Criminal complaints have been launch against the two.
During the past few weeks Pakistan Stock Exchange has reported massive changes as it saw rapid drops and hikes, unseen in the market’s history. It could be one of the reasons that spurred SECP into action.
In a separate notification, SECP has approved the listing of wheat futures contracts on the Pakistan Mercantile Exchange (PMEX).