SEC cautions five investment advisors, two investors
Notice of Action to one investment advisor:
The Securities and Exchange Commission of Sri Lanka (SEC) by virtue
of the powers vested in it under the provisions of the Securities and
Exchange Commission of Sri Lanka Act No. 36 of 1987 as amended,
conducted an investigation pertaining to heightened trading activity and
the unusual price escalation witnessed by the shares of Dankotuwa
Porcelain PLC, Blue Diamonds Jewellery Worldwide PLC, Touchwood
Investments PLC and in the warrants of Environmental Resources
Investments PLC during the period July 1 - August 3 2010.
The evidence elicited during the course of the aforesaid
investigation suggested that the trades in some of the aforesaid
securities which had been executed by five investment advisors amongst
several (including a trainee investment advisor) representing three
stock broking firms and two out of a large number of investors could
possibly be construed as trades of a manipulative nature.
In the above circumstances, the Members of the Commission, at its
285th Meeting, held on August 19 2011, having considered the matters
highlighted in the investigation report decided to caution the five
investment advisors and the two investors in writing. Accordingly, the
said investment advisors as well as the investors were cautioned against
execution of trades in future which can be perceived as manipulative.
Further, the Members of the Commission, at the above meeting having
considered the findings of an investigation pertaining to suspected
market/price manipulation in the shares of MTD Walkers PLC during 11th -
19th January 2010 decided to issue Notice of Action to another
investment advisor intimating that proceedings will be instituted
against him in terms of the provisions of the Securities and Exchange
Commission of Sri Lanka Act No. 36 of 1987 as amended.
Consequently, Notice of Action was issued on the aforesaid investment
advisor in respect of the contravention of Rule 12 of the SEC Rules
published in the Gazette Extraordinary No. 1215/2 dated 18th December