Errant stockbrokers on SEC chopping block
Capital markets regulator, the Securities and Exchange Commission (SEC) is coming down hard on stockbrokers for promoting stocks ‘without a basis’.
The latest to be on the chopping block is Capital Trust Securities (Pvt) Ltd which was slapped with an administrative penalty of Rs. 500,000 recently.
It was imposed in terms of section 178 (1) (ii) of the SEC Act, for having contravened section 112 (1) of the SEC Act and was directed in terms of section 178 (1) (i) of the SEC Act to comply and observe practices relating to conducting of its activities as a stockbroker licensed by the SEC. The stockbroker had made recommendations to clients without a basis in respect of the shares of Softlogic Life Insurance PLC and harming its price.
The above administrative penalty was imposed in terms of the decision of the Members of the Commission taken at its 472nd Meeting held on September 14 after having considered the procedures followed by the stockbroker pertaining to these recommendations.
Over the past two months, more than 20 market offenders were identified, and action was taken by the capital market regulator.
The regulator has withheld some of the names of certain personnel against whom enforcement actions were taken in the past pertaining to certain offences, in line with the retention policy for publications.
Sources say that intensified probes on high networth individuals and certain traders to show cause pertaining to offences committed over the past few years are being completed.
However, despite letters of warning by the regulator to certain individuals, for publishing certain posts on social media, making recommendations and comments on securities trading on the Colombo Stock Exchange without a proper basis and without being registered by the SEC as investment advisers and stockbrokers, still there are certain persons conducting these types of damaging activities.
So much so that they are using their social media handles to mock the regulator and the market operator.
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