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By Maheen Senanayake
In a landmark directive, the Colombo Stock Exchange (CSE) secretariat following investigations into allegations of unauthorized transactions, over-trading and churning (excessive trading for sole purpose of earning broker commissions) has ordered Taprobane Securities to pay the complainant approximately Rs. 3.4 million (Rs.3,378,440.84) which the CSE has determined was the direct loss to the client as a result of Taprobane’s unfair practices.
The CSE which determined that Taprobane had indeed violated SEC directives SEC/LEG04/11/23 dated November 12, 2004, SEC/LEG/10/09/42 dated September 14, 2010 and SEC/LEG/10/12/92 dated December 29, 2010 and Rules 7.1.2 of section 7 and 3.5 of Section 3 of the CSE Stockbroker Rules.
Taprobane which was also the broker on the controversial NSB-TFC deal who acted as both seller and buyer had had a directive issued to its Chairperson and the board of directors to suspend its Chief Executive Officer Mr. Dinal Wijemanne from functioning as a broker as he had also functioned as a board member on the board of The Finance Company (TFC).
It is understood that the commission to Investigate into Allegations of Bribery or Corruption filed a ‘B’ Report before the Colombo Chief Magistrate , Rashmi Singapulli where upon summons have been issued to Mr. Niranjan Niles Acting CEO, Taprobane Securities and Mr. Dinal Wijemanne, its former CEO to appear in court on February 28, 2013.
The complainant, Mr. Manilal de Mel, had intimated to the CSE that he had lost over rupees ten million due to unauthorized transactions by Taprobane whilst he (the client) was out of the country. Furthermore, upon requesting the client to liquidate his entire portfolio, the former CEO had instead transferred the client’s Central Depository System (CDS) account to another broker further violating SEC directives as the broker in question had had his license suspended by the SEC several years previously and hence was not certified by the CSE to deal with a client on behalf of a brokering firm.
Reliable source reveal that one of Taprobane Securities brokers had in fact confessed and admitted to these allegations at the CSE hearing.
"What is insane is the fact that these people thought they could do this without fear of getting caught. Specially when buying high and selling low", said Manilal de Mel. ``It was in July of 2011 after two months of asking for my trading account statements that I observed that Taprobane Securities had surreptitiously utilized unauthorized broker credit for those two months while I was away overdrawing an amount of Rs. 8.1 million on my account."
http://www.island.lk/index.php?page_cat=article-details&page=article-details&code_title=67324
In a landmark directive, the Colombo Stock Exchange (CSE) secretariat following investigations into allegations of unauthorized transactions, over-trading and churning (excessive trading for sole purpose of earning broker commissions) has ordered Taprobane Securities to pay the complainant approximately Rs. 3.4 million (Rs.3,378,440.84) which the CSE has determined was the direct loss to the client as a result of Taprobane’s unfair practices.
The CSE which determined that Taprobane had indeed violated SEC directives SEC/LEG04/11/23 dated November 12, 2004, SEC/LEG/10/09/42 dated September 14, 2010 and SEC/LEG/10/12/92 dated December 29, 2010 and Rules 7.1.2 of section 7 and 3.5 of Section 3 of the CSE Stockbroker Rules.
Taprobane which was also the broker on the controversial NSB-TFC deal who acted as both seller and buyer had had a directive issued to its Chairperson and the board of directors to suspend its Chief Executive Officer Mr. Dinal Wijemanne from functioning as a broker as he had also functioned as a board member on the board of The Finance Company (TFC).
It is understood that the commission to Investigate into Allegations of Bribery or Corruption filed a ‘B’ Report before the Colombo Chief Magistrate , Rashmi Singapulli where upon summons have been issued to Mr. Niranjan Niles Acting CEO, Taprobane Securities and Mr. Dinal Wijemanne, its former CEO to appear in court on February 28, 2013.
The complainant, Mr. Manilal de Mel, had intimated to the CSE that he had lost over rupees ten million due to unauthorized transactions by Taprobane whilst he (the client) was out of the country. Furthermore, upon requesting the client to liquidate his entire portfolio, the former CEO had instead transferred the client’s Central Depository System (CDS) account to another broker further violating SEC directives as the broker in question had had his license suspended by the SEC several years previously and hence was not certified by the CSE to deal with a client on behalf of a brokering firm.
Reliable source reveal that one of Taprobane Securities brokers had in fact confessed and admitted to these allegations at the CSE hearing.
"What is insane is the fact that these people thought they could do this without fear of getting caught. Specially when buying high and selling low", said Manilal de Mel. ``It was in July of 2011 after two months of asking for my trading account statements that I observed that Taprobane Securities had surreptitiously utilized unauthorized broker credit for those two months while I was away overdrawing an amount of Rs. 8.1 million on my account."
http://www.island.lk/index.php?page_cat=article-details&page=article-details&code_title=67324
