Law: Securities Act, 2015

Section: 150,133,134,167

Law: Securities Brokers (Licensing and Operations) Regulations, 2016

Section: 16(i),16(1)(m)

Securities Act (III of 2015)--- ----Ss. 150, 133, 134 167---Securities Brokers (Licensing and Operations) Regulations, 2016, Reglns. 16(1)(i) 16(1)(m)---Disciplinary action in respect of licensed person---Duties and obligations of a securities broker---Market manipulation---Fraudulently inducing trading in securities---Liability of licensed person for the acts of representative---Scope Company was imposed upon a penalty of Rs. 5,00,000/- for market manipulation, fraudulently inducing trading in securities and its failure to establish the internal code of practice---Validity Company had failed to establish an internal code of practice which resulted in abnormal trading in the shares of a Modraba Company by the sponsors of the Company who made a gain of Rs. 2.4 million and its employees had encouraged investment in the same Modraba Company through their Facebook page---Companys employees, even if not regular, were acting for the Company, therefore, the Company was liable for their actions---Appellate Bench held that the penalty was rightly imposed upon the Company--- Impugned order was upheld. ORDER 1. This Order is passed in Appeal No.111 of 2017 filed under section 33 of the Securities and Exchange Commission of Pakistan Commission Act, 1997 (SECP Act) against the Order dated 14/09/17 (the Impugned Order) passed by Commissioner, Securities Market Division (the Respondent). 2. The brief facts of the case are that the Securities and Exchange Commission of Pakistan (the Commission) on routine scrutiny of trading data of the Pakistan Stock Exchange (PSX) observed a sharp increase in the price of Unicap Modaraba (the UCAPM) from 13/12/16 until 16/12/16 during which Mr. Rizwan Riaz and Mr. Atif Shabbir were major traders. The Commission, vide order dated 13/01/17, in exercise of powers conferred by section 139 of the Securities Act, 2015 (the Securities Act) conducted an investigation into the affairs pertaining to the trading activities of Mr. Rizwan Riaz and Mr. Atif Shabbir and any connected person in the scrip of UCAPM during the period 01/12/16 to 31/12/16 (the Review Period). The investigation team submitted the investigation report on 18/05/17 which inter alia…

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