Sindh Special Court issues 1st ever insider trading conviction

June 18, 2025 (MLN): The Sindh Special Court (Offences in Banks) has issued Pakistan’s first-ever conviction for insider trading in a case filed by the Securities and Exchange Commission of Pakistan (SECP).

The court convicted Zakir Hussain Somji for violating Section 128 of the Securities Act, 2015, according to a press release issued.

SECP Chairperson Akif Saeed praised the commission’s legal team for the achievement, stating that the judgment will enhance investor confidence in the country’s capital markets and support capital formation.

He also expressed optimism that the ruling would set a strong precedent for pending cases and ongoing investigations related to insider trading and market manipulation.

The case stemmed from the SECP’s inspection of suspicious trading activity, which was flagged through an analysis of Karachi Automated Trading System (KATS) data covering the period from January 1, 2014, to February 2, 2016.

It was suspected that Somji, due to his position at a financial institution, exploited insider information for personal gain.

Further investigation revealed that he purchased 11.79 million shares of various companies.

From just 10.43% of this investment, he earned an unlawful profit of Rs2.86m

Based on these findings, the SECP filed a formal complaint under Section 128, with penalties applicable under Section 159 of the Securities Act, 2015.

Following a full trial, which included arguments from SECP’s Special Public Prosecutors and the defence, the court announced its judgment on June 14.

It imposed a penalty of Rs8.59m, three times the amount of unlawful gain, to be paid within seven days. In the event of non-payment, the convict will be remanded to jail until the full amount is deposited.