Following an inquiry carried out in accordance with the Securities Act, 2015, the SECP has lodged a criminal case against two persons implicated in front-running equity transactions by a major institutional investor between October 1, 2021, and December 31, 2021.
The Special Court (Offenses in Banks), Karachi has received the criminal complaint number 15 of 2024, which is dated April 8, 2024. This complaint highlights a case where a day trader, in collaboration with an investment officer from an institutional investor, engaged in fraudulent activities. The day trader purchased shares before the institutional investor placed buy orders, and then sold those shares to the institutional investor. This illicit practice continued for several months.
Upon analyzing the order-level data, the SECP investigation team discovered that a significant number of trades executed by the day trader coincided with trades executed by the institutional investor. As a result, the institutional investor suffered losses while the day trader gained profits. The evidence strongly suggests that the investment officer of the institutional investor was actively involved in colluding with the day trader.
SECP remains dedicated to promoting fairness and transparency in the capital market, with the aim of bolstering investors’ confidence.
