AsiaNet-Pakistan Premier Editorial Content and Press Release Distribution Service
Islamabad, The Securities and Exchange Commission of Pakistan (SECP) has taken legal action against two individuals for their involvement in front-running transactions that disadvantaged a large institutional investor. This criminal activity occurred between October and December 2021, with the complaint filed recently in Karachi’s Special Court for Offenses in Banks.
According to Securities and Exchange Commission of Pakistan, the investigation under the Securities Act of 2015 led to the discovery of illicit activities where a day trader, in collusion with an investment officer from the institutional investor, engaged in buying shares shortly before the institution was scheduled to place large buy orders. This scheme allowed them to sell the shares back to the institutional investor at a profit, resulting in significant losses for the institution and gains for the day trader.
The SECP’s analysis of order-level data indicated that a substantial portion of the day trader’s transactions directly matched those of the institutional investor, highlighting the systematic nature of the front-running scheme. The filed criminal complaint marks a significant step by the SECP to uphold market fairness and transparency, aiming to bolster investor confidence in Pakistan’s capital markets.