SEC suspends licence of HNB broker
Pays Rs. 1 million fine
Channa De Silva
The Securities and Exchange Commission (SEC) has cancelled the stock
broking licence of Sanjeewa Maddumage Atapattu, an investment advisor
attached to HNB Stockbrokers (Pvt) Ltd for a period of three years.
The investment advisorís licence has been cancelled for three years
for offences of front running where the complaint was made and the
investigations have been completed only recently and he will neither be
able to trade or interact with clients for a period of three years,
Securities and Exchange Commissionís Director- General Channa De Silva
told Daily News Business yesterday.
He has made some appeals after paying a fine of Rupees one million
and the case has been compounded, the Director- General said.
Front running a client is a serious offence and as per the Securities
and Exchange Commission Rules Section 14 were it states: ďNo individual
shall directly or indirectly trade in the securities of a company ahead
of significant purchases or sale of securities of that company for his
client with the intent to profit by trading in such securities
thereafter. Section 1 of Rule 24 of the SEC Member regulations also
states that a member firm shall not directly or indirectly obtain the
services of another person for three years whether as an independent
contractor or otherwise deal with clients of member firms in an event of
an offence has been compounded against him.
Both Hatton National Bank Managing Director Rajendra Theagarajah and
HNB Stockbrokers Managing Director / CEO Deva Ellepola were not
available for comment.