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FINANCIAL CHRONICLE™ » CORPORATE CHRONICLE™ » Sri Lanka insider dealing crackdown urged after Rajaratnam conviction

Sri Lanka insider dealing crackdown urged after Rajaratnam conviction

+6
Rocky
gann
Antonym
CHRONICLE™
UKboy
Quibit
10 posters

Go down  Message [Page 1 of 1]

Quibit


Senior Vice President - Equity Analytics
Senior Vice President - Equity Analytics

The conviction of Sri Lankan-born fund manager Raj Rajaratnam for insider dealing has led to calls for a crackdown on the practice said to be rife in the island's own stock market, a report said.

"Most investors in Sri Lanka trade on inside information," was how the Sunday Times newspaper headlined a story on insider dealing on the Colombo stock exchange.
Many of the investors in the Sri Lankan stock market trade in shares based on inside information but regulators are scared to take these offenders to task, the newspaper quoted stockbrokers as saying.

They were reacting to the announcement that billionaire Galleon hedge fund manager, Raj Rajaratnam was found guilty by a US court for insider trading. Rajaratnam, who faces a lengthy prison term, is to appeal against the verdict.

The newspaper said that in Sri Lanka stock market offenders are not prosecuted and jailed and top businessmen and investors caught breaking the law can get off by 'compounding' their offence and paying a fine with no admission of guilt.

"The Securities & Exchange Commission (SEC) law needs more teeth,” it quoted as stockbroker as saying.

The paper quoted Channa de Silva, a former Director-General of the SEC and chief executive of LR Global Lanka Asset Management Co as suggesting the need for an institutional framework to allow whistle-blowing.

“The law needs to be strong and be a deterrent to this kind of activity,” de Silva told the newspaper, adding that Rajaratnam’s conviction is a lesson for regulatory and exchange authorities, and the investor.

The Sunday Times also quoted J C Weliamuna, former Transparency International Sri Lanka Executive Director, as saying in most cases there was a pattern in insider trading.

“In the US, the regulator means business while in Sri Lanka all officials or appointees to regulatory bodies are directly or indirectly related to business," Weliamuna said.

"In such a situation they don’t want to stop insider trading as they are dealing with friends, colleagues and politicians.”

The media is also under pressure from the corporate community to suppress bad news about companies, the Sunday Times also said in a separate comment.

"Big advertisers regularly using the tool of advertising to either hide the facts pertaining to their companies - despite proclamations of governance, transparency and accountability in their annual reports – and threaten to pull out advertising if the media runs stories adverse to their company," it said.

"Like all newspapers, we too learnt the bitter lesson that even Supreme Court judgments against corporate Sri Lanka is too ‘sacrosanct’ to be commented on, if it's not in favour of corporate bosses!"

Courtesy - LBO

UKboy

UKboy
Senior Vice President - Equity Analytics
Senior Vice President - Equity Analytics

Personally YES I think we need to have regulators with back born to crackdown these manipulators at CSE.

As Tubal mentioned in another thread foreigners will be scared to come and invest this sort of a market.
http://forum.srilankaequity.com/t3674-future-of-cse

But most importantly it all belongs to us. Nobody forces us to buy shares. We still strongly believe things called "Rallies".
Hopefully at least this stupid credit facility will be over in few weeks.

CHRONICLE™

CHRONICLE™
Admin

Why don't we start listing down the names of the known insiders so that SEC could probe their dealings.


Mr A L - Chairman of a recently listed Commercial Bank made Rs400mn in 5 days by buying and selling Sri Lanka Telecom (SLT) shares just before the announcement of the mandatory offer. He had inside information about the deal. He is yet to be prosecuted!



Last edited by Quibit on Mon May 16, 2011 4:25 pm; edited 1 time in total (Reason for editing : Amended to exclude specific names being mentioned.)

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Antonym

Antonym
Vice President - Equity Analytics
Vice President - Equity Analytics

In principle, I agree to Avinash's idea of naming (and shaming) known insider traders and manipulators on this public forum. Plus for you.

However, we should be aware that these are influential people who can hit back. They could use fair or foul means, which we may not be willing or able to do. Let's at least have a contingency plan: If we wake up one morning and are unable to access SLEF, what do we do?

gann

gann
Senior Manager - Equity Analytics
Senior Manager - Equity Analytics

One way to level the playing field is SEC publishing the names of top X number of buyers/Sellers of each stock traded at the end of day trading. Great if they can have a online realtime search for public to get that info. Public has the right to know who bought what since these companies are public.

Rocky

Rocky
Senior Manager - Equity Analytics
Senior Manager - Equity Analytics

if you believe in the survival of the fittest, then The big sharks will always be there and we are at the bottom of the food chain. The leftovers can be nibbled away by poor us,

Remember that the bull that threshes the floor should not be muzzeled. That will be always of life in this beautiful land. If you want to be another martyr, you can go your self.

I oersonally di not subscribe to IT but learn to play with unlevelled playing fields.

milanka

milanka
Vice President - Equity Analytics
Vice President - Equity Analytics

Antonym wrote: Let's at least have a contingency plan: If we wake up one morning and are unable to access SLEF, what do we do?

First of All + for your thoughts on contingency plan.
There are ways and means to block Internet site access for a particular site with-in a country. some sites are blocked with-in SL. Just for infor.

http://forum.srilankaequity.com/u188

duke


Senior Manager - Equity Analytics
Senior Manager - Equity Analytics

Antonym wrote:In principle, I agree to Avinash's idea of naming (and shaming) known insider traders and manipulators on this public forum. Plus for you.

However, we should be aware that these are influential people who can hit back. They could use fair or foul means, which we may not be willing or able to do. Let's at least have a contingency plan: If we wake up one morning and are unable to access SLEF, what do we do?

i think there would not be a problem if you state, amara perera bought 3,000,000 shares at Rs.10 on 11th 2 days before the so and so announcement and he sold 3,000,000 at Rs 20 on 12th, the day after the announcement. Because this is just a FACT.

we have to be careful of protecting the only source where law abiding citizens can express their opinions. it seems if you have enough money and power laws are like toilet paper.

gann's idea is very good and very transparent.

salimts


Senior Equity Analytic
Senior Equity Analytic

Antonym wrote: we should be aware that these are influential people who can hit back.

Before anything could be done, our legal system and the law enforcement institution should be revamped.

Rstock


Senior Equity Analytic
Senior Equity Analytic

BTW. What is insider trading?

duke


Senior Manager - Equity Analytics
Senior Manager - Equity Analytics

Rstock wrote:BTW. What is insider trading?

E.g.
A of the X company says to B, tomorrow X company is going to announce a share split, a huge dividend, quarter report with 100% profit, going to make 100% lose (nobody publicly knows until it is announced. only insiders know.). With that advantage B buys X shares cheap today or sells at higher price, and sell them tomorrow when everybody else learns about it and when the price goes up or down.

Rstock


Senior Equity Analytic
Senior Equity Analytic

Thanx duke

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