SECP Files Criminal Case Against Bank Employee Over Fraud Worth Millions

In another high profile case of complex white collar crime in the stock market, the Securities and Exchange Commission of Pakistan (SECP) has filed a criminal complaint of insider trading and fraud against a former employee of one of the largest banks in Pakistan.

The accused, Khalid Iqbal, was a senior employee at the bank, serving as the head of the its capital market operations. He had unrestricted access to the information regarding investment decisions of the bank and also had the authority to make these decisions. That is, he was an insider and had the information as defined in the 2015 Securities Act.

Violating the securities law as well as his employer’s investment policy, the rogue employee abused his authority and engaged in trading of certain illiquid shares listed on the Pakistan Stock Exchange. He bought large quantities of these shares at unjustified prices using the money of the bank. He executed this trading activity with his Dubai-based accomplice and together they made millions of rupees in illegitimate gains at the cost of the bank.

The bank suffered a substantial loss at the hands of this rogue employee and conducted an internal inquiry against him. It also extended full cooperation with the SECP in investigating this case. It is stated that he is no longer with the bank. However, investigation is going on to catch more of his accomplices.

Commenting on the case, Zafar Hijazi, the SECP chairman, said that

“White collar criminals in the stock market think that their crime is too sophisticated to be caught, but this case is a poignant reminder that the securities’ regulator is on their trail. The SECP has been investing in its capacity to tackle stock market manipulation and there are more such high profile criminal cases in the pipeline.”