Penalty for stock manipulation: why it’s less than illegal gains
Penalties are meant to discourage wrongdoing, but what happens when the punishment is less than the profit gained from illegal activities? This issue is at the forefront of discussions surrounding stock manipulation in Bangladesh.
The Bangladesh Securities and Exchange Commission (BSEC) has faced criticism for imposing fines that are significantly lower than the global norm. In many cases, the fines are only a fraction of the gains made through manipulation. This disparity raises concerns about the effectiveness of penalties in deterring repeat offenders.
Market experts point out that globally, fines for such offenses are typically two to three times higher than the illegal gains. However, in Bangladesh, the penalties seem insufficient to deter individuals from engaging in manipulative practices repeatedly.
As a result, some individuals continue to manipulate share prices without fear of significant consequences. The lack of a strong deterrent may embolden wrongdoers to commit financial crimes, undermining the integrity and fairness of the market.
It is essential for regulatory authorities to address this issue and ensure that penalties are commensurate with the severity of the offense. By strengthening enforcement measures and imposing more substantial fines, the BSEC can send a clear message that market manipulation will not be tolerated.
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