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SECP files criminal complaint against two individuals on charges of front-running

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 April 17, 2024 (MLN): The Securities and Exchange Commission of Pakistan (SECP) has filed a criminal complaint against two individuals who were found involved in front-running equity trading by a large institutional investor, said a statement issued today.

The complaint was filed based on an investigation conducted under the Securities Act, 2015.

The analysis of order-level data by 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, during the period from October 01, 2021 to December 31, 2021.

A substantial portion of the trades executed by the day trader during this period matched with trades executed by institutional investor as a counterparty, SECP said.

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," the statement reads.

SECP said it is committed to ensure fairness and transparency in the capital market to enhance investors’ confidence.

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Posted on: 2024-04-17T20:21:31+05:00