His predecessor Ms. Indrani Sugathadasa resigned for the same reason citing her principles.
When Karunaratne resigned in August last year, he had told COPE that 17 investigations were pending.
The Securities and Exchange Commission (SEC) conducted 19 investigations into market malpractices in 2012 of which 12 were pending at the end of the year, data presented by the capital market watchdog in its 2012 annual report released on Wednesday showed. In 2011, 18 investigations were carried out with nine pending at the end of the year.
In 2012, four investigations into suspected market/price manipulation were concluded without any action being taken in the absence of material evidence. One investigation was pending litigation. Two investigations concluded with warning letters issued.
In 2011, two investigations were pending litigation and five investigations resulted in the issuance of warnings. Two investigations led to offences being compounded without the admission of guilt.
"During the year 2012, a total of 54 surveillance referrals were prepared on various issues. In addition, the SEC also received 14 surveillance referrals from CSE. The number of surveillance referrals increased to 54 in 2012, compared to 33 in 2011, an increase of 64%. This increase in referrals can be attributed to the full implementation of the new surveillance system. Apart from the alerts that are generated by the system itself, additional data and analysis tools are available and this has led to both increased detection as well as the ability to build better cases of any perceived market malpractices," the 2012 annual report of the SEC said.
"During the year 2012, a total number of 19 investigations were conducted by the SEC into instances of suspected market misconduct, including market/price manipulation, insider dealing, front-running, etc.
"The year under review also saw several enforcement actions being taken by the SEC in respect of offences/irregularities committed under the SEC Act and the rules/regulations made thereunder.
"Of significance in this respect were the warnings issued to two investment advisors and three investors following an investigation conducted into suspected market/price manipulation, upon the conclusion of which the stock broking firm through which the manipulative trades had been executed was also cautioned by the SEC.
"Pursuant to another investigation conducted by the SEC into a case of suspected front-running, two investment advisors were warned, and such warnings were publicized on the website of the SEC.
"Out of the total number of investigations conducted in 2012, two investigations remained suspended throughout the year owing to the reason that the issues pertaining to the said investigations formed the subject matter of pending litigation," the SEC said.