Market manipulation in book building, SECP files criminal case

ISLAMABAD,: The Securities and Exchange Commission of Pakistan (SECP) has filed a criminal complaint in the Karachi sessions court against a group comprising of two brothers, their cousin and their facilitator broker namely Adam Securities Limited, for manipulating in the book building activity of Al Shaheer Corporation Limited, which was listed in 2015. The Chief Executive, of said broker, also happens to be the father of the two brothers.
Based on an investigation, the SECP found that the group indulged in market manipulation during book building process and thus had the influence to manipulate the strike price of an issue. The last 12 minutes bidding activity of the group indicated that the intent was to ramp the strike price of issue rather than bidding at a fair price.

The group increased/decreased its bidding volumes in a manipulative fashion while keeping its bid price constant, so as to manipulate the strike price discovery process and induce other bidders to take part in bidding activity aggressively. It may be noted that market manipulation is a criminal offence and is defined in Section 133 of the Securities Act, 2015.
It is one of its kind complaint filed by the SECP wherein a group has been alleged to have indulged in manipulation during book building process, which depicts the SECP’s resolve for indiscriminate action against all kinds of market abusers.