ISLAMABAD: The Securities and Exchange Commission of Pakistan on Wednesday filed a criminal complaint against Stock Master Securities (Pvt.) Ltd. (“SMSPL”) in the Court of Session Judge, Lahore.
Under Section 38 of the Securities and Exchange Commission of Pakistan Act, 1997 (“SECP Act”) and Section 29 of the Central Depository Act, 1997 (“CD Act”) for offences under Section 32(5) of the SECP Act and Section 28(2) of the CD Act read with all enabling provisions of the code of criminal procedure, 1898,according to press release issued by SECP.
The Additional Session Judge, Lahore vide order dated July 26, 2014 has registered the above complaint.
SMSPL was a broker of Lahore Stock Exchange Ltd. (“LSE”).
The Central Depository Company of Pakistan Ltd. (“CDC”) suspended the Participant ID of the said broker for being non- compliant with the regulatory requirement.
After suspension of SMSPL by CDC, the LSE received a large number of investors’ complaints against SMSPL regarding unauthorized movement of shares from their CDC sub accounts maintained under the Participant ID of SMSPL.
SMSPL filed a petition for winding up of the company through Lahore High Court, Lahore (“LHC”).
Thereafter, the LSE expelled the SMSPL from membership of the exchange. In view of the forgoing, it appears that SMSPL adopted the recourse of winding up by the LHC for evading payments to its investors.
The Commission had ordered an enquiry into the affairs of the SMSPL under Securities and Exchange Ordinance, 1969 and SECP Act.
Grave violations of the securities laws were highlighted in the enquiry report.
Therefore, while taking the cognizance of the regulatory violations the Commission has initiated criminal proceedings against the SMSPL.