The Securities and Exchange Commission (SEC) is scrutinizing the trades during early this month, (when the Colombo bourse recorded all time high gains) in a bid to identify market manipulators, SEC sources said.
“This was the period when low valued shares increased in price by more than 1000%. We are looking at these trades closely to identify the perpetrators. They will be dealt with severely,” the SEC source told the Business Times.
Last week the SEC imposed price bands –for the first time in the market – restricting the price of any stock or security from changing either way (up or down) by 10%. The ‘suspect’ securities were four warrants of Environmental Resources and Investments (ERI) and stocks of Touchwood, Dankotuwa Porcelain and Blue Diamond (voting and non-voting).
Six brokers- Asia Securities, Asha Phillip Securities, Acuity Stockbrokers, Capital Alliance, Capital Trust and Bartleet Mallory Stockbrokers – were summoned by the SEC mid last week and warned as their exposure to these shares was high.
Some brokers said that the managements of their firms have brought in ‘stops’ to avoid such situations (large exposures to such shares) in the future. “An investor who wants to buy these shares needs about 75% of margin (of the particular value of shares they want to purchase) or 75% upfront cash equivalent,” a broker said.
SEC official said the offenders will be identified by early next week.
|
E-mail
