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KARACHI – Significant developments were made during the interrogation of Lyari gangwar head Uzair Baloch Thursday. Baloch revealed the names of 10 key operatives of Lyari gangwar’s women wing.

March 03, 2017
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SECP reports defaulting broker to international securities regulators

KARACHI: The Securities and Exchange Commission of Pakistan (SECP) has reported a local stockbroker, involved in financial fraud, to international securities regulators, according to an SECP press statement.

The SECP reported Lahore-based stockbroker, M.R. Securities, to international securities regulators through the International Organization of Securities Commissions (IOSCO). The brokerage house has also been reported to the Financial Monitoring Unit to initiate action under the Anti Money Laundering Act, 2010.

"There is a trend among Pakistani financial fraudsters to run abroad, assuming that they will not be on the radar of the securities’ regulator of the host jurisdiction," the statement read.

"The owners of defaulting brokerage houses such as Ace Securities, Stock Street, and M.R. Securities are all believed to be hiding abroad."

The reporting measures will help discourage securities’ fraud and tighten accountability for the culprits, it added.

“The SECP will continue to report to international regulators any stockbroker found involved in securities fraud in Pakistan,” said Zafar Hijazi, the SECP Chairman.

The SECP is a member of the IOSCO, the international body that brings together the world's securities regulators and sets standards for the securities sector. Its members regulate more than 95% of the world's securities markets in more than 115 jurisdictions.

The commission has approached the IOSCO for such information sharing on financial fraud under a multilateral memorandum of understanding to which it is a signatory.

Earlier in a joint meeting, the SECP and the State Bank of Pakistan (SBP) voiced their concern over financial scams and frauds, including illegal deposit taking. The two regulators resolved to pay special attention to such fraudulent activities by adopting a coordinated approach along with the cooperation of law enforcement agencies.

The SECP, in close cooperation with the SBP, is also working on developing a mechanism for collecting market intelligence about potential financial scams in their incubation.

This intelligence mechanism shall enable the regulators to act more proactively to minimize losses to unsuspecting investors. It will be complemented by additional security measures against fraudsters after their cases have been detected and concluded.

The statement further read that under these additional security measures, those involved in financial scams once will find it difficult to access financial services sector again without raising red flags, be it opening a bank account or taking an insurance policy.

This is in line with international practices where individuals and companies found guilty of financial crime remain on the radar of the financial sector service providers, it added.

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