Karachi KSE-100 index, main index of Pakistan equities, down 516 points as Securities and Exchange Commission of Pakistan (SECP) has filed a criminal complaint against two individuals at who were involved in front running.
Bank AL Habib Limited (BAHL) and Meezan Bank Limited (MEBL) contribute negative 121 points to the index. Lucky Cement Limited (LUCK), Fauji Fertilizer Company Limited (FFC) and The Hub Power Company Limited (HUBC) contributed negative 41, 39 and 36 points to KSE-100 index.
According to the details, the Securities and Exchange Commission of Pakistan (SECP) has filed a criminal complaint at the Special Court (Offenses in Banks), Karachi based on an investigation conducted under Securities Act, 2015.
The criminal complaint number 15 of 2024 dated April 8, 2024, has been filed against two individuals who were found involved in front running vis-à-vis equity trading by a large institutional investor during the period from October 1, 2021 to December 31, 2021.
The analysis of order-level data by SECP investigation team revealed that a day trader, with the active connivance of an investment officer of the institutional investor, purchased shares before the placement of buy orders by the institutional investor and subsequently sold those shares to the institutional investor. The practice continued for a few months.
A substantial portion of the trades executed by the day trader during this period matched with trades executed by institutional investor as a counterparty. This resulted in losses to the institutional investor and gains to the day trader. There is strong evidence that the investment officer of the institutional investor was actively colluding with the day trader.
