SECP Provides Clarity on Sharing Information in Insider Trading Cases
The Securities and Exchange Commission of Pakistan (SECP) recently issued a statement to clarify its involvement in sharing information related to insider trading cases with the Federal Investigation Agency (FIA).
The SECP made it clear that their primary focus has been investigating cases of market manipulation and insider trading. They have taken necessary actions by filing criminal complaints in accordance with the Securities Act of 2015.
Responding to recent reports of the FIA’s initiation of investigations against individuals in the capital market, the SECP stressed its commitment to upholding transparency and accountability within the financial sector. The Commission mentioned that it has followed its legal obligations by providing relevant case details to the FIA.
In an official press release, the SECP explained the legal framework that empowers the FIA to investigate financial crimes, including money laundering activities linked to predicate offenses governed by the Anti-Money Laundering Act of 2010. As insider trading and market manipulation are classified as predicate offenses under this legislation, the SECP has cooperated with the FIA in its investigations.
With the AML Act of 2010 outlining the regulatory framework for insider trading and market abuse under the SECP’s jurisdiction, the FIA approached the Commission seeking information on completed cases involving these offenses. The aim was to facilitate parallel investigations under the AML Act.
In response to the FIA’s formal request, the SECP shared a comprehensive list of cases where investigations were finalized and criminal complaints were submitted to the courts. Specifically, in September 2024, the SECP provided details of 27 criminal complaints filed between 2008 and 2024, as instructed by the Anti-Money Laundering (Referral) Rules of 2021.
Moreover, the SECP clarified that the records of these cases are public as they form part of judicial proceedings. Any legitimate authority or individual can access these records following the standard legal procedures.
The Commission highlighted that sharing information with the FIA regarding these cases does not imply any wrongdoing on the part of the companies or brokerage houses involved. The focus remains on identifying and prosecuting individuals who directly engage in insider trading and market manipulation, as outlined in the Securities Act of 2015.