New SEC Chief says won’t turn blind eye to robbers invading bourse

Tuesday, 27 March 2012 00:55 - - {{hitsCtrl.values.hits}}

By Cassandra Mascarenhas

Newly appointed Chairman Tilak Karunaratne yesterday emphasised that the Securities and Exchange Commission (SEC) will not turn a blind eye to robbers invading the Bourse and promised stringent action against those engaged in insider dealing and manipulation.

Speaking for the first time at a public forum since assuming duties, Karunaratne told the SEC- Institute of Chartered Corporate Secretaries-Daily FT co-organised seminar on Insider Dealing that plans are underway to introduce new methods of dealing with offenders of insider trading. Recalling a famous quote from country’s first executive President J.R. Jayawardene when opening up the economy in 1977 “Let the robber barons come,” Karunaratne said: “The question is whether we are now going to emulate him (Jayawardene) and turn a blind eye to robbers invading the bourse and taking innocent investors for a ride? The SEC is determined not to do so and work towards the protection of market integrity.”

Noting that there was renewed interest in business ethics and insider trading, he said that SEC wishes to have a market where all pertinent information is fully available to all participants and where prices respond immediately and correctly to available information.

“This would help in creating and maintaining a market in which securities can be issued and traded in an orderly and fair manner,” he added.

Karunaratne also said that more Sri Lankans are investing in the stock market than ever before. “Sri Lankans now invest several times of the amounts than they have invested in the pre-war era. We believe that these investors will remain in the market only if the trust and confidence is preserved,” SEC chief stressed at the seminar at which Cambridge University’s Adam Smith Professor of Corporate Governance Prof. Gishan Dissanaike gave an expert presentation titled “Insider Trading: Good, bad or ugly.”

Karunaratne said that to ensure Lankan securities market functions efficiently and with integrity, time was ripe to borrow from other jurisdictions new ways of dealing with insider trading. “I am happy to state that we at the SEC have embarked on a project to modernise the current securities laws in Sri Lanka and to ensure that we are equipped to face the future challenges.”

Explaining new methods to deal with offenders of insider trading, he said with an amended SEC Act, insider trading will not be a compoundable offence and will enable the imposition of civil sanctions in addition to criminal sanctions available under the present Act.

“At the moment we are investigating certain cases. The SEC is doing its job and is at a point of accelerating its processes. I can assure you that I will do my best to correct these shortcomings,” SEC Chief emphasised.