Thailand’s Securities and Exchange Commission (SEC) lacks ability to nab share price manipulators as it has no authority to file charges against perpetrators

SEC lacks ability to nab manipulators

Published: 3 Apr 2013 at 00.00

The securities regulator wants to put more effort into cracking down on share price manipulators during the bull market, but its work remains limp as it has no authority to file charges against perpetrators.

The Securities and Exchange Commission (SEC) is only the starting point for a stock manipulation crackdown, as these matters go to court, said secretary-general Vorapol Socatiyanurak.

The SEC just filed its first criminal complaint this year against Shine Bunnag and 12 others for manipulating the share prices of Mida Leasing Plc (ML) from March-May 2008 and in August 2010 and doing the same to Max Metal Corporation (MAX) shares in September 2010. There are growing worries over the irregular movements of several stocks now that the market is skyrocketing.“We have sufficient evidence to file criminal complaints against Mr Shine and 12 others,” said Mr Vorapol.

Mr Shine also faces a criminal complaint filed with the Department of Special Investigation last year for manipulating share prices from 2008-10, with Mr Vorapol adding that there is progress on the case without elaborating. He was accused of trading 12 securities through his own and others’ accounts in a manner that raised share prices.

The recent SEC probe found Mr Shine and his allies continuously sent trading orders through the accounts of several groups of people to buy and sell both securities in a manner that raised share prices, using volume orders at different price levels, said Mr Vorapol.

In addition, certain evidence pointed to securities trading orders being executed through others’ trading accounts for the benefit of Mr Shine, the SEC said in a statement.

Last year, the SEC filed complaints against 70 alleged offenders for breaching the Securities and Exchange Act of 1992, with 21 of the 70 accused of manipulating share prices.

However, Mr Vorapol declined to comment on whether there are any other suspected stock manipulation cases under SEC investigation.

Veerathai Santiprabhob, a former chief strategy officer at the Stock Exchange of Thailand, said criminal procedures take a long time and the SEC cannot file charges itself, hindering any attempt at cracking down on stock manipulators.

“Specific knowledge is needed to file charges against those suspected of manipulating stock prices, as these cases are fairly complicated. If the SEC could file charges itself, that would help to sharpen the effectiveness of stock manipulation crackdowns,” he said.

About bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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