The SECP has filed a criminal complaint against two individuals who were found involved in front-running equity trading by Investments of State Life Insurance, during the period from October 1, 2021, to December 31, 2021.
The criminal complaint number 15 of 2024, dated April 8, 2024, has been filed at the Special Court (Offenses in Banks), Karachi.
According to the findings of the SECP’s investigation team, a day trader named Abdul Basit, in collusion with an Assistant General Manager (AGM) of Investments at State Life Insurance, an institutional investor, engaged in purchasing shares before State Life placed buy orders, and subsequently selling those shares to the institution.
Sources told ProPakistani that the total estimated value of trade was Rs. 5 billion, traded from October 2021 to December 31, 2021, resulting in losses for the institution and gains for the trader.
The analysis of order-level data by the SECP investigation team revealed that a day trader, with the active connivance of an investment officer of the institutional investor, purchased shares before the placement of buy orders by the institutional investor and subsequently sold those shares to the institutional investor.
The practice continued for a few months. A substantial portion of the trades executed by the day trader during this period matched with trades executed by institutional investors as a counterparty.
This resulted in losses to the institutional investor and gains to the day trader. There is strong evidence that the investment officer of the institutional investor was actively colluding with the day trader.
SECP is committed to ensuring fairness and transparency in the capital market to enhance investors’ confidence.
