SECP files case against former bank employee

Says Rizvi was allegedly involved in insider trading, made profit of millions

KARACHI: The apex regulator, the Securities and Exchange Commission of Pakistan (SECP), has filed a criminal complaint against a former employee of The Bank of Punjab for his alleged involvement in insider trading.



Syed Misbahuddin Rizvi served as head of equity and capital market at the bank. He was responsible for the placement of orders for equity investment and/or disinvestment of shares on behalf of the bank.

The accused served the bank for around seven and a half years from June 2009 to November 2016.

The SECP filed the case at the court of the session’s judge in Karachi.

“The SECP found that he had inside information regarding the bank’s decisions to invest/disinvest as defined in Section 130 (g) and Section 129 (d) of the Securities Act, 2015 respectively. The accused was found involved in insider trading in collusion and connivance with his relatives, Uddin Rizvi, Syed Khalid Grami and Syed Wajid Grami,” the regulator said in a statement.

The SECP’s investigation revealed that the bank’s employee took advantage of inside information and was involved in active trading in shares, which was also prohibited under the Employees’ Prudential Regulations of the bank. “He made a profit of millions of rupees through this illicit trading,” it said.

The analysis of the trading data of Karachi Automated Trading System (KATS) for the period from August 24, 2012, to February 2, 2016 (review period) obtained from the Pakistan Stock Exchange revealed that a number of transactions of Syed Khalid Grami (Khalid) and Syed Wajid Grami matched considerably with the bank in various scrips on different dates in a suspicious manner for their own personal gain.



“Syed Misbah affected a series of transactions in different scrips in conjunction with trading activities of the bank in contravention of Section 128 (1) of the Securities Act, 2015,” it said.

The SECP has also taken up the matter of bank employees’ involvement in insider trading with the State Bank of Pakistan for appropriate measures and issuance of policy guidelines, it said.

Published in The Express Tribune, April 1^st, 2017.

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