The Securities and Exchange Commission of Pakistan (SECP) has lodged a criminal complaint against the Company Secretary of a listed company, four of his close relatives, and a private limited company for alleged insider trading. The case based on findings under the Securities Act 2015 has been filed in the Special Court (Offenses in Banks), Sindh, Karachi.
The SECP alleges that between August 22, 2023 and October 12, 2023 these individuals bought shares of a listed company using confidential, non-public information about the company’s planned share buy back and delisting. This information, considered insider knowledge under the Securities Act 2015 was obtained through the Company Secretary, who had access to sensitive price moving details as part of the delisting process.
The investigation claims he shared this information with his relatives and the CEO of a related company, enabling them to buy shares before the news became public. After the public announcement, they sold the shares at higher prices, earning illicit profits of Rs. 338.085 million. None of the accused had previously traded in the company’s shares.
Under the Securities Act 2015 insider trading violation secp is a criminal offense punishable by up to three years in prison, a fine of up to Rs. 200 million or three times the unlawful profit earned.