SECP files criminal case against an insider

Staff Reporter

Islamabad

The Securities and Exchange Commission of Pakistan (SECP) has filed a criminal complaint against an employee of a leading bank for his alleged involvement in insider trading.
The main accused, Syed Misbah Uddin Rizvi, was serving as head, equity and capital market, in the said bank and was responsible for the placement of orders for equity investment/ disinvestment of shares on behalf of the bank.
The case, filed in the court of the session’s judge, Karachi, is based on an investigation. The SECP found that he had inside information regarding the bank’s decisions to invest/disinvest as defined in Section 130 (g) and Section of 129 (d) of the Securities Act, 2015 respectively. The accused was found involved in inside trading in collusion and connivance with his relatives, Uddin Rizvi, Syed Khalid Grami and Syed Wajid Grami.
The SECP’s investigation revealed that the bank employee took advantage of the inside information and was involved in active trading in shares, which was also prohibited under the Employees’ Prudential Regulations of the bank. He made a profit of millions of rupees through this illicit trading.
The analysis of the trading data of KATS for the period from August 24, 2012, to February 2, 2016 (review period) obtained from Pakistan Stock Exchange revealed that a number of transactions of Syed Khalid Grami (Khalid) and Syed Wajid Grami matched considerably with the bank in various scrips on different dates in a suspicious manner for their own personal gain. Syed Misbah effected a series of transactions in different scrips in conjunction with trading activities of the bank in contravention of Section 128 (1) of the Securities Act, 2015.

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