Financial Times

SEC insider dealing case put off

The Court of Appeal hearing into the writ applications seeking to quash the Securities and Exchange Commission's decision to prosecute its former chairman Michael Mack and another ex-director of Aitken Spence for alleged insider dealing was postponed till September when it came up for argument on Friday.

The SEC answered the writ applications that were taken for argument on Friday but the court gave Mack and Norman Gunewardene, another ex-chairman of the Spence conglomerate, time till September to file counter-arguments.

Mack and Gunewardene are opposing the SEC's decision to prosecute them for the offence of insider dealing in the sale of Aitken Spence shares. The SEC decided to prosecute them after a lengthy investigation into the transactions of Mack, Gunewardene and another Aitken Spence ex-director, Manil de Mel, as well as some of their family members.

The matter sparked a controversy after some of the SEC commissioners tried to suppress the investigation and even tried to ignore the advice of the Attorney General that there was a prima facie case against Mack and Gunewardene and that the probe be continued against de Mel.

It is over a month since the SEC sought the AG's advice on whether to proceed with the investigation into the share deals of the family members of the accused and on the notice of action that is to be issued on de Mel. But there is still no response from the AG's Department. The delay has raised fears among investors that the case could be suppressed.

The Sunday Times FT has received many letters from concerned readers inquiring about the fate of the insider dealing case, which damaged the credibility of the SEC, the markets watchdog.