SECP files fourth criminal case on insider trading by bank employees

ISLAMABAD (May 17): In continuation of its recent crackdown on banks’ employees conducting insider trading, the Securities and Exchange Commission of Pakistan (SECP) has filed its fourth such criminal complaint in the Karachi sessions court against three employees of the bank and their accomplices.
 
The employees accused of this grave offense were holding key positions as head of treasury and investment, dealer capital market and financial analyst, that were responsible for the bank’s capital market operations. By virtue of their office, they had access to material information about the investment decisions of the bank in shares of companies listed at the Pakistan Stock Exchange (PSX).
 
These employees, while misusing their authority, passed inside information to certain clients of two brokerage houses for the purpose of insider trading. This resulted in front running the orders placed by the bank in order to make personal gains, thus, making them insiders as defined under the 2015 Securities Act.
 
Furthermore, trading patterns of alleged clients of brokerage houses explicitly show possession of inside information because they effectively synchronizing their orders with those of the bank. Based on their illegal trading activity, these treacherous clients made huge gains while causing significant loss to the bank. This case depicts blatant violation of the relevant provisions of the 2015 Securities Act as the accused abused their positions by defrauding the bank and passed inside information to the accused clients.