SEC strengthens Investigation Division
The Securities and Exchange Commission (SEC) has finally managed to strengthen its Investigation Division.
In the past three years the SEC had advertised for Director Investigations but was unable to secure a suitable candidate. Now they are evaluating candidates, according a SEC source.
The Business Times learns that within four weeks of his appointment in May, SEC’s new Chairman Ranil T. Wijesinha has more than doubled the investigation team to 15 from six.
A team of 10 in 2014 had become six when four personnel had left the SEC owing to personal reasons. The SEC had struggled to find ‘good’ people since then. “We managed to strengthen this department with internal transfers from four other divisions which had some of the most experienced big four law firm trained senior chartered accountants and lawyers,” a SEC source told the Business Times.
The SEC in the past three years has got a lot of flak for not completing or re-starting investigations – especially those of stock market mafia related.
During the previous regime with Thilak Karunaratne’s first stint as the SEC Chairman, he had 17 probes on stock market manipulations which were then subsequently closed upon his resignation by his successor Nalaka Godahewa. This too happened during the Rajapaksa regime.
The worst manipulations of the stock market including pump and dump of stocks by high net worth investors was done during 2011 to 2013 resulting in a bubble. The then SEC Chairperson Indrani Sugathadasa ultimately stopped this crash somewhat but resigned from her post under pressure in December 2011. Then Mr. Karunaratne was appointed by then President Mahinda Rajapaksa but less than a year later he was asked to step down by the then President for allegedly ‘antagonising’ some high-net-worth investors and powerful stockbrokers in the country, who were hand in glove with the leaders of the earlier regime.
They were popularly known as the ‘mafia’ and tried their best to stifle some media organisations by targeting reporters who were writing on their manipulations. At the time they were above the law and helped to get rid of two Chairmen of the SEC within just two years.
In 2015 when Mr. Karunaratne was reappointed, they were shaken up but nothing as expected happened as ‘much evidence was destroyed’. In addition the SEC had a capacity issue. Now, the SEC seems to be getting its act together, but only time will tell.