KARACHI – Sindh Special Court (Offences in Banks) handed out the first-ever conviction for insider trading in the history of Pakistan in a case filed by the Securities and Exchange Commission of Pakistan (SECP).
According to the SECP, the court convicted Zakir Hussain Somji, Assistant Vice President (AVP) – Investments at Habib Metropolitan Bank Limited (HMB), for insider trading violating the Securities Act, 2015.
SECP chairman Akif Saeed said that the judgment will boost investor confidence in Pakistan’s capital markets and, in turn, facilitate capital formation. He also expressed hope that the ruling will set a precedent for pending cases and ongoing inquiries into insider trading and market manipulation.
After recent revelations surrounding past insider trading case, the bank issued an official statement clarifying its position and actions taken against the former employee involved. According to Bank, Mr. Somji misused Bank’s equity-related decisions for personal financial gain. The irregularities were detected through the Bank’s internal monitoring systems, leading to his immediate termination.
Bank also acknowledged and appreciated the efforts of the Securities and Exchange Commission of Pakistan (SECP) in handling the matter with diligence and due legal process.
Pakistan Insider Trading Case
The case originated from SECP’s inspection of suspicious trading activity identified through analysis of Karachi Automated Trading System (KATS) data from January 1, 2014, to February 2, 2016. It was suspected that the accused, by his position at HMB, misused insider information related to the bank’s investment and disinvestment decisions for personal gain.
An investigation revealed that the accused purchased 11,795,100 shares of various companies, including 1,230,900 shares (10.43%) acquired from HMB, and sold 11,836,600 shares — 4,915,200 (41.52%) of which were sold back to HMB — earning an unlawful profit of Rs. 2,866,646.
Following the investigation, SECP filed a formal complaint. After a full trial and hearing arguments from SECP’s Special Public Prosecutors and the defence, the Special Court delivered its judgment on June 14, 2025.
The Court convicted the accused of insider trading and imposed a penalty of Rs. 8,599,938 — three times the unlawful gain. The amount is to be deposited within seven days, failing which the convict will be remanded to jail until full payment is made.
