SEC frowns at LAUGFS
The Securities and Exchange Commission of Sri Lanka (SEC) is rolling up its sleeves to bring more offenders to justice.
This time they filed action in the Colombo Fort Magistrate’s Court on November 5 against three investors. W.K.H. Wegapitiya, U.K. Thilak N. De Silva and Thakshila I. Hulangamuwa have been charged with market manipulation, conspiracy to commit market manipulation and for aiding and abetting to commit such offence with respect to the shares of Laugfs Gas PLC (LGL), a company listed on the Colombo Stock Exchange (CSE).
These trades happened during the pump-and-dump era and the buyer was the EPF, market sources said. But it’s unclear if this trade resulted in losses to the fund in this particular trade. The sources added that this is just one trade where EPF funds were invested but there were many other instances these monies were squandered during the infamous mafia era.
The defendants are the Chairman and the Managing Director of LGL and an investment advisor attached to a stockbroker firm. Orders had been placed for trading in the shares of LGL on October 7 and 10, 2011 using the CDS accounts of certain clients of the stockbroker firm by the investment advisor by the use of several manipulative devices, according to SEC. “Such share trading executed had created a false and misleading appearance of active trading, with respect to the market and the price of the LGL share, in contravention of Rule 12 of 211 SEC Rules,” the SEC in a statement said noting that charges against the defendants have been filed for the violation of Rule 12 of the SEC Rules.
This is the third time the regulator went to courts within less than a year against offences committed during the past regime where pump and dump was encouraged. Sources said that there’re more cases being worked on.
The defendants are to appear before the Magistrate on December 13.