Share Manipulation: SEC sues 5 investors

The Securities and Exchange Commission (SEC) yesterday sued five investors for their involvement in the recent sharemarket scam -- four and a half months after a government probe committee accused them of market manipulation in its probe report.

A Dhaka court asked the accused to appear before it on October 17 following the stockmarket regulator's first legal move since the sharemarket collapse in January.

SEC Director Mahbuber Rahman Chaudhury filed two cases with the Dhaka Chief Metropolitan Magistrate's Court against the five individual investors.

The complainant alleged that the investors created an artificial crisis in the market by buying shares at low prices. Taking the advantage of the crisis, they later sold their shares at high prices and pocketed a huge amount of money.

Abu Sadat Md Sayeem and his brother Abdul Mabin Molla were accused in one case, while Syed Sirajuddoula, his wife Rasheda Akhter Maya and Habibur Rahman in the other case.

Sayeem and his brother are accused of manipulating share prices of Eastern Housing Ltd (EHL), a listed company, through serial trading.

The cases were filed on instructions of the finance ministry after the government probe committee recommended legal action against stockmarket manipulators.

The plaintiff said Sayem and Mobin made 25 percent of the total transaction of EHL shares in July-August last year through their eight BO (beneficiary owner's) accounts including individual and joint accounts.

They bought 5.86 lakh EHL shares through their BO accounts and sold 2.55 lakh shares from July 27 to August 19. The trade was 24.5 percent of the total transaction of EHL shares.

Along with daily buy-sale on each day, the accused on August 1 last year bought the highest 2.77 lakh EHL shares -- 66.3 percent of the total trade in EHL shares -- on a single day.

The accused created an environment of artificial active trading in this way and made profit illegally, the complainant alleged.

Sirajuddoula and his wife Maya, and Rahman were also involved in artificial active trading through bulk transactions in shares of Peoples Leasing and Financial Services Ltd (PLFSL).

They bought a huge quantity of PLFSL shares and sold them at the same time causing PLFSL share prices to jump. It allowed the accused to pocket a huge amount of money illegally.

Source: Daily Star