The Securities and Exchange Commission of Pakistan (SECP) has filed a criminal complaint against the CEO of Cedar Capital and his two clients for manipulating the share price of Pak Electron Ltd (PAEL) on the Pakistan Stock Exchange (PSX).
The SECP filed the case in the court of a Karachi sessions judge on Friday.
The regulator’s investigation revealed that the clients of Cedar Capital fraudulently induced the potential market investor to trade in PAEL by manipulating the price and volume of shares and creating an artificial market.
The investigation report covered two review periods — from April 1, 2013 to April 16, 2013 and from May 17, 2013 to July 8, 2013.
The accused traded 13.4 million PEAL shares constituting 18 per cent of the total trading volume in the first period.
In the second period, the accused traded 19.4m shares of PAEL, which comprised 22pc of the overall trading volume. While taking such a large long position in the shares, the group/co-accused generated a substantial volume each day, the SECP said.